P11D Dispensations

Dispensations are notices of exemption from HM Revenue and Customs for certain expenses. Once issued a dispensation remains in place indefinitely, however, they are reviewed by HMRC at regular intervals, usually five years at most, to ensure that their conditions still apply. The expenses covered by a dispensation commonly include:

  1. Travel and associated costs
  2. Petrol for company car
  3. Car rental
  4. Phone bills
  5. Business entertainment
  6. Business credit cards
  7. Subscriptions and other fees

There is no requirement to pay any tax or national insurance on expenses covered by a dispensation, or even to report them to HMRC. The dispensation will apply from the date the application is accepted, or may be backdated in some cases. Applications for a dispensation are made by completing form P11DX and returning it to your tax office. Contact us for more information about what can be included in a dispensation and assistance with making an application.

This entry was posted in TaxTalk July 2011 and tagged . Bookmark the permalink.
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