EIM30095 - Dispensations: revoking a dispensation

Section 65(6) ITEPA 2003

A dispensation continues in force until it is revoked unless a term is put to it when it is first given. The Officer of HMRC has the right to revoke it any time. Revocation should be recorded on the copy of the original dispensation.

Where a dispensation has been revoked and HMRC believes that the employer (or the person making expenses payments or providing benefits) has been negligent in operating a dispensation, or has misrepresented the facts, when applying for a dispensation, HMRC may make the revocation retrospectively to the date the dispensation was granted or wrongly applied.

Retrospective revocation may be necessary as well if a dispensation was applied for and granted by HMRC based on facts that were presented and accepted at the time, but the basis on which the expenses payments and benefits were provided subsequently changed. If after those changes a dispensation would not have been granted by HMRC, but the employer continued to provide expenses and benefits under the terms of the original dispensation, without informing HMRC of the change in circumstances, HMRC may decide that retrospective revocation is due to the date when the change occurred.

Where it is apparent that negligence or misrepresentation has taken place and expenses and benefits were provided under a dispensation when they should have been subject to tax and NICs, HMRC will pursues retrospectively the tax and NICs liabilities due when the expenses payments and benefits were originally provided.