EIM30051 - Dispensations: general

Section 65 ITEPA 2003

If HMRC is satisfied that no tax will be payable on particular expenses payments or benefits of a director or employee within the benefits code (see EIM20007), it can give notice to the person paying or providing them that this is the case.

The notice given is called a dispensation.

When a dispensation is given all the legislation relating to the particular expenses payments and benefits of the director or employee no longer applies.

Therefore a dispensation should only be issued where the department is satisfied no tax will be payable, either because the employee would be entitled to a deduction from the expenses or benefit under Sections 336 to 338 ITEPA 2003 or for some other valid reason.

See EIM30052 for more detail about dispensations.