Published On: 18 March 2016
From April 2016, P11D dispensations for expenses will be abolished and will be replaced by new rules, which will cover payments to employees that are deemed to be tax exempt expenses.
Expenses and allowances includes:
- Travel and subsistence expenses while working away from home.
- Entertaining expenses – staff and clients/customers.
- Professional Subscriptions which are approved by HM Revenue and Customs.
- Childcare voucher/allowance within the tax exempt thresholds.
- Statutory incidental allowance for overnight stays in the UK (£5 per night) and overseas (£10 per night).
- Statutory Benchmark rate for working abroad.
The above list is not exhaustive.
The same qualifying conditions that were applicable for a dispensation continue under these changes. Record-keeping is strongly advised to ensure that in any event of HM Revenue and Customs enquire into the business affairs that supporting documentation such as receipts of the expenses incurred on the reimbursement of expenses and allowance payments are exempt from income tax and National Insurance.
If you would like further clarification of any point please contact Wendy Cheung.