Ltd Co operating Inside IR35 - claiming subsistence - is it allowed?

[Glencky]

Slightly confused here - AFAIK, the scale rates can only apply if YourCo has a dispensation.

Unless you mean the overseas scale rates, but the OP mentioned working in the UK I think.

Yeah, I think the scale rates can only apply with a dispensation too (for the UK - for my overseas working earlier in the year I did mostly use the scale rates). I wasn't concerned about this point because I plan to only claim receipted anyway for UK. But I agree with you, I think it's scale rates only with dispensation for UK.

[ASB]

I think the guidance is a bit unclear. On the one hand it mentions tick a box on p11d. On the other it talks about specific caution before granting for a one man/psc. If intending to use a phone call to hmrc to confirm might be prudent.

[jamesbrown]

IIRC, you have no reporting requirements for employees earning at a rate of less than £8,500 per year (this was a rate set way back in the 70s and never changed). In other words, there is no need to complete either a P11D or to apply for a dispensation to use the benchmark scale rates under those circumstances. Of course, what this means in practice is that Ltd. Co. directors do need to apply for a dispensation to use the benchmark scale rates. If you want to use the benchmark scale rates without conducting a sampling exercise (i.e. not applicable to us), you need to tick the relevant box on the P11D or request a dispensation in writing. However, I believe that HMRC are looking to eliminate dispensations for close companies altogether (as well as this outdated earnings rate). For this reason, it is now much more difficult for close companies to have a dispensation approved. That's my understanding anyway.

[jamesbrown]

Yeah, I think the scale rates can only apply with a dispensation too (for the UK - for my overseas working earlier in the year I did mostly use the scale rates). I wasn't concerned about this point because I plan to only claim receipted anyway for UK. But I agree with you, I think it's scale rates only with dispensation for UK.

That's my understanding too w/r to the overseas scale rates. The overseas rates are now based on the Foreign and Commonwealth Office rates. A few years back, I think HMRC realised that it was impossible for an average company to conduct sampling for overseas rates as the basis for an individually agreed dispensation. Thus, they moved over to these standard rates for which no dispensation or reporting on the P11D is required. These overseas scale rates are in addition to the daily amount for incidentals when travelling outside the UK.

[Jessica@WhiteFieldTax]

Slightly confused here - AFAIK, the scale rates can only apply if YourCo has a dispensation.

Unless you mean the overseas scale rates, but the OP mentioned working in the UK I think.

You may be right: in the back of my mind there were uk scale rates as well, but I encourage clients to work on the discipline of receipted costs.