Getting a P11D dispensation

Completing and submitting forms P11D can be both costly and time consuming, especially for larger businesses. Did you know that the Revenue might on application grant a dispensation so that routine expense payments and benefits that would not give rise to a tax liability need not be reported on forms P11D?

To enable the Inspector to grant a dispensation you must be able to demonstrate that:

No tax would be payable by the employees on the expense payments or benefits
Expense claims are independently checked and authorised within your company
Each claim is submitted with appropriate receipts

HM Revenue & Customs will need to be certain exactly what expenses you reimburse and the method of control you use to identify expenses that might be taxable. This is to ensure, among other things, that if a dispensation were granted, and a taxable payment is made within a category of expense covered by the dispensation, it will be picked up and reported on the relevant employee's P11D. A dispensation does not mean that the accounting procedures for recording such expenses can be relaxed.

The application must be in writing, and may be by letter or, for smaller companies, by form P11DX, accessed from the HM Revenue & Customs website.

You should give as much detail as possible of the kind of expenses paid, the control procedures adopted for authorisation, approval and payment of expenses, and a copy of the expenses claim form.

If granted, the dispensation:

Will be effective from the date granted - so it is worthwhile applying at any point in the tax year
May cover all employees, a class of employee, or certain named individuals only
Will be reviewed from time to time, and may be withdrawn if the conditions are no longer satisfied

We can save you a lot of time and trouble by helping with the application. Please contact us if you would like us to help.

Easy Accountancy

Easy Accountancy is the UK’s only national specialist accountancy firm for freelancers, sole traders and small businesses

If you’ve just started out as a freelancer or run a small business, you’ll definitely need a small accountant and there are plenty of options out there! However, most accountants will charge you every time you get in touch with them; for every phone call, email or meeting.

We don’t want our clients to be scared to contact us and potentially lose out on valuable tax saving advice. It's even more important when you first start out as you really need to set your business up in the best way possible. As a start up you’ll probably have loads of questions and will really appreciate the fact you can call your accountant as many times as you like without the fear of racking up large bills.

Our low cost, all-inclusive fixed-fee accountancy service includes unlimited access to your own accountant throughout the year, so you never need to worry about picking up the phone and then receiving a bill afterwards for the privilege, and covers all your business and personal tax affairs needs. All clients additionally receive:

Help to run your business in the most tax efficient way possible
Help so you can understand the taxes you need to pay
Advice on the best ways to manage your business
Updates and reminders so you'll never miss a deadline
Help to ensure you maximise your tax allowances
Provide proactive tax advice throughout the year

We’ve saved our clients up to half on their accountancy bills – if you’d like a quote, click on the quote me button to the right of this page. Alternatively, call us on 0500 234111 / 01442 275767 or email jessica@easyaccountancy.co.uk

We also have a money-back service guarantee - all of your telephone calls and emails will be answered on the same day, or we will refund your monthly fee (another first within the accountancy world).

To appoint us as your accountants, please fill in our Client Agreement Form online.

If you are a contractor working through a limited company then visit SJD Accountancy (our sister company) who specialise in providing tax advice and accountancy services for Limited Company contractors. You can also keep up to date by following the SJD Accountancy Twitter

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