SE31657 - The Schedule E expenses rule: incur and defray out of the emoluments: dispensations

A dispensation may be granted where an employer reimburses an employee for expenditure that would be deductible under Section 198(1) ICTA 1988, see SE30051. In these circumstances the employee cannot also deduct the expense under Section 198. This is because reimbursements that are covered by a dispensation are not chargeable emoluments. Therefore any expense met out of the reimbursement covered by the dispensation cannot have been incurred or defrayed out of the emoluments of that office or employment.