EIM30055 - Dispensations: conditions to be satisfied

Section 65(1) to (4) ITEPA 2003

In order that a dispensation can be issued:

• a person has to supply the Officer with a statement of the cases and circumstances in which payments of a particular character are made or benefits or facilities of a particular kind are provided and
• HMRC has to be satisfied that no tax will be payable by reference to the payments, benefits or facilities mentioned in the statement.

In practice the Officer should issue a dispensation where all the following conditions are satisfied:

• employees are reimbursed expenses that are deductible within Part 5 ITEPA 2003 (see EIM30057)
• claims to expenses are independently checked and authorised (see EIM30059)
• where possible claims are vouched (see EIM30061)
• The employer has procedures in place to ensure that only qualifying employees receive reimbursement in the form of a scale rate payment (see EIM05200 onwards).
• where advances of expenses are made, the employer has procedures to ensure they are fully accounted for, and any excess repaid by the employee.

For the way a dispensation should be worded see EIM30085.