SE30051 - Dispensations: general

Section 166 ICTA 1988

If an Inspector is satisfied that no tax will be payable on particular expenses payments or benefits of a director or employee within Part V Chapter II ICTA 1988, he can give notice to the person paying or providing them that this is the case.

The notice the Inspector issues is called a dispensation.

When the Inspector does so 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 Inspector is satisfied no tax will be payable either because the employee would be able to claim a deduction for the expenses or benefit under Section 198(1) ICTA 1988 or for some other valid reason.

See SE30052 for more detail about dispensations.