ECH15020 - Expenses, Benefits and Pecuniary Liabilities: Round Sum Allowance

The definition of a round sum allowance can be found at EIM5100. PAYE (and Class 1 NIC on the profit element - see NIM05020) applies to such payments

ECOs should consider that

• it is not uncommon for an employer to view amounts which are really untaxed additional pay as expenses
• the allowance may be genuinely incurred but not be an allowable expense for tax purposes
• the allowance may be excessive.

When ECOs discover round sum payments they should

• frame the initial questions to test whether payments are in respect of genuine expenses or (This text has been withheld because of exemptions in the Freedom of Information Act 2000)pay
• test the systems in place which support the payments
• attempt to reach conclusions about the payments during the same visit that the payments come to light
• (This text has been withheld because of exemptions in the Freedom of Information Act 2000)