What is Dispensation?
A dispensation is a notice or formal acknowledgement from HMRC that shows that you no longer need to report expenses and benefits to them on your P11D or P9D forms. It also removes the need to pay tax or national insurance contributions on items covered by dispensation.
If a business is granted dispensation then it lasts indefinitely. However, HMRC reviews these regularly that you still comply with the terms and conditions applied.
Applications for dispensation must be made through HMRC. The dispensation can be used to cover standard expenses such as the ones list below
- Travel
- Telephone bills
- Fuel costs
- Business expenses
- Fees and subscriptions
- Hire costs
Businesses can apply for dispensation online or via the post. Further information can be found on the HMRC site.
