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21 September 2015
Employers will no longer need to apply for a dispensation or report those expenses on form P11D.
An exemption from paying tax and National Insurance on qualifying paid or reimbursed expense payments will be introduced from 6 April 2016.
As a result when an employee is entitled to a fully matching tax deduction the employer will no longer need to apply for a dispensation or report those expenses on form P11D.
All other non-allowable expenses will remain subject to tax and National Insurance. Employees will still be able to claim tax relief from HMRC for non-reimbursed expenses.
The new exemption does not apply to expenses or benefits in kind provided under a salary sacrifice arrangement. After 5 April 2016 any expenses payments to employees under these arrangements will need to be made after deducting tax and National Insurance.
All dispensations agreed with HMRC will...
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