Subsistence - Exactly what can be claimed?

[Wanderer]

You may only apply those benchmark rates if you have dispensation from HMRC to do so.

It's not that difficult to get a dispensation though.

[JB3000]

You may only apply those benchmark rates if you have dispensation from HMRC to do so.

True.

"An employer can opt to use the benchmark rates by ticking the appropriate box on form P11Dx or by stating their intention to use them in a dispensation letter. The request may be part of a new dispensation application or a revision of an existing dispensation."

EIM05230 - Employment income: scale rate expenses: subsistence expenses: advisory benchmark scale rate payments

[Scruff]

My dispensation took all of five minutes to complete the form.

[jamesbrown]

It's not that difficult to get a dispensation though.

Apparently, it's getting more difficult to have these approved for close companies.

[Clare@InTouch]

Apparently, it's getting more difficult to have these approved for close companies.

Very much so. We used to apply and get them approved by all but one particular HMRC office, but these days we rarely get anything except a partial approval. They often won't approve use of scale rates without further proof now, and you have to go very careful with assuming that a dispensation will cover absolutely everything automatically.

[TheCyclingProgrammer]

Very much so. We used to apply and get them approved by all but one particular HMRC office, but these days we rarely get anything except a partial approval. They often won't approve use of scale rates without further proof now, and you have to go very careful with assuming that a dispensation will cover absolutely everything automatically.

I have a dispensation but not for scale rates. Is there really much advantage to scale rates unless you're a bigger organisation?

[Clare@InTouch]

I have a dispensation but not for scale rates. Is there really much advantage to scale rates unless you're a bigger organisation?

A lot of people find it easier as they can claim a flat sum rather than what they spend, so it saves keeping track of exact amounts.

[Martin at NixonWilliams]

A lot of people find it easier as they can claim a flat sum rather than what they spend, so it saves keeping track of exact amounts.

True, although it is important to remember that the claims must be broadly in line with what is actually spent.

For anybody interested, there is a consultation in place at the moment that would effectively do away with dispensations and hopefully replace them with a more simple process. The details can be found in the link below:

https://www.gov.uk/government/upload...ion_180614.pdf

[Contreras]

For anybody interested, there is a consultation in place at the moment that would effectively do away with dispensations and hopefully replace them with a more simple process. The details can be found in the link below:

https://www.gov.uk/government/upload...ion_180614.pdf

Thanks Martin.

TCP has already covered this at length, but just in case there remains denialdoubt in some peoples minds what the rules say in relation to P11D and expenses paid directly from the company account:

Current tax rules

2.2 Where an employer pays or reimburses a qualifying expense to their employee they are required to report that payment to HMRC at the end of the year on form P11D (and the employee must still make a claim to HMRC to receive their tax relief) unless that employer has a dispensation.

On the matter of scale rates, which currently can only be used with a dispensation:

5.23 It is unclear whether there is a pressing need for one person companies or very small, close companies to be able to pay a scale rate in respect of expenses. For such small employers there can be no real administrative saving from paying a scale rate rather than reimbursing themselves the actual amount of expenses incurred.

5.24 In order to protect against potential abuse of the exemption by some small companies the Government proposes that one person companies and directors of small, close companies would not be permitted to be paid a scale rate for expenses under the exemption (but this would not affect those companies paying a scale rate to other employees). However, the Government would like to hear from any small employers who would be affected by this proposal.

5.25 In particular the Government would like to understand the reasons very small employers use scale rates, in order to determine whether there should be any circumstances in which these employers should be able to pay a scale rate to their directors.

Responses by email to be submitted by 9 September 2014.

[Newbie Simon]

You may only apply those benchmark rates if you have dispensation from HMRC to do so.

You can however claim actual costs incurred, with receipts, as business travel expenses. 24-month rule applies.

There are benchmark rates for travel outside of the UK which do not require dispensation.

There's also a statutory rate for 'incidentals', no receipts required, if you have an overnight stay.

Thanks for your replies.

Say I earn 50k a year and spend say £30 on lunch per week (say 46 weeks) so that's £1380 my take home pay would be 50000-1380=48620-20% tax=£38896 assuming I have no other expenses is this correct?