PAYE Dispensations – online application form
HMRC are now allowing businesses to apply for PAYE dispensations online.
Dispensations can remove the reporting requirements for those expenses and benefits where no tax liability arises, although there is a trap for the unwary. HMRC reviews dispensations regularly to make sure that the conditions under which they were issued still apply. Such reviews often involve visits to the business premises and often uncover related issues of non-compliance. This can lead to demands for extra tax, interest and penalties.
The main expenses typically covered by dispensations are properly authorised and monitored:
- Travel, including subsistence costs associated with business travel
- Fuel for company cars
- Hire car costs
- Business entertainment expenses
- Credit cards used for business
- Fees and subscriptions
Once granted dispensations last indefinitely but can be withdrawn if an employer is found to be negligent in the operation of the dispensation. HMRC usually reviews the issue of dispensations at intervals of five years or less.