HMRC PAYE Expenses Dispensations

Payroll and employment tax P11D dispensations cease to be effective from April 2016 From 6 April 2016, a fundamental change will apply in relation to dispensations for employee expenses, which will no longer be granted by HMRC. In terms of submitting P11Ds for the tax year 2016/17 onwards, employers will need to determine the technical basis upon which expenses are allowable, or treated as taxable benefits in kind. Employers must also have a system in place to check that the expenses are actually incurred by their employees. Employers have long become accustomed to agreeing dispensations with HMRC so that they have clarity regarding which employee expenses can be disregarded for P11D reporting.