Expenses bench mark scale rates be claimed and P11Ds

Expenses bench mark scale rates be claimed and...

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Can expenses bench mark scale rates be claimed without a dispensation? I have a dispensation that specifically excludes Bench mark scale expenses because it is a one man company. Can these still be claimed, put on a P11D and then be claimed as incurred wholly, exclusively and necessarily in the performance of duties, under section 336 of the Income Tax (Earnings and Pensions) Act 2003.

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By glynisbm
15th Jun 2011 13:49

benchmark scale rates
I found this in the Revenue & Customs brief 24/09 which might be helpful;

Overview
Under the current rules an employer is required to notify HMRC of all expenses paid to an employee, even where those expenses would be allowable, unless they have a dispensation. A dispensation is an agreement between HMRC and an employer which allows the employer to pay an agreed rate for allowable expenses without the need to report the expenses to HMRC. An employer may apply for a dispensation by submitting a completed form P11DX. As part of this process, where business travel expenses are paid, the employer often agrees scale rates for travel and subsistence expenses with HMRC that broadly match the allowable expenditure incurred by its employees on business travel.

HMRC currently expects employers to conduct a sampling exercise before it will agree to a particular rate being included within a dispensation. The aim of the exercise is to identify a reasonable level of allowable expenditure that reflects the most common level of spending.

HMRC recognises that a sampling exercise can be burdensome and expensive for employers. It has therefore introduced an advisory system of benchmark scale rates for day subsistence payments that an employer can use without having to carry out a sampling exercise.

As part of this new approach, in response to concerns from some employers and professional advisers about consistency between what is agreed for different employers, HMRC also proposes to standardise the different scale rates that it will agree with employers.

Benchmark system/rules
Under the benchmark system, HMRC has set advisory scale rates for particular day subsistence expenses that it will accept for all employers. As long as the employee has incurred subsistence expenses while travelling on an allowable business journey, employers will be able to make tax and NICs free subsistence payments up to the advisory rates without agreeing them with HMRC. Employers wishing to use the benchmark scale rates for subsistence payments will simply need to notify HMRC of their intention by ticking the appropriate statement/box on form P11DX before starting to use the system.

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By bduncan
28th Jun 2011 13:26

Thank you

The box was ticked on the P11dx but the dispensation was not given so I will enter them on the P11D and then reclaim them as WEN.

Following other threads I will then be reapplying for a dispensation stateing that they will be checked by me their accountant.

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