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Dispensations are an excellent way of saving yourself a lot of work at the end of the tax year when the Revenue expects you to file P11Ds for expenses and benefits. With a dispensation, you are allowed to ignore certain expenses and not report them on a P11D.

Your tax office will grant you a dispensation against having to report certain types of expenses if they are happy that you have sufficient control of your accounting system for recording those expenses and there would be no taxable benefit. Travel and subsistence is the most common example as this is usually incurred wholly, exclusively and necessarily for the purpose of doing your job. Other examples include telephone bills, office supplies, subscriptions and entertainment.

To apply for a dispensation, you need to fill out Form P11DX and send it to your PAYE office. The Revenue is more relaxed about granting dispensations to smaller employers than they used to be as they recognise that they save everyone a lot of work. However, they do follow them up every few years to make sure that the terms and conditions are being complied with and they have the power to revoke them retrospectively if they suspect that they are being abused.

For small companies controlled by one director they are still a bit reticent about business entertainment. They seem to think that sole directors are less constrained in this area as there are no other authorised officials to vouch their receipts. It is therefore common for smaller companies to be granted dispensations that exclude entertaining, meaning that these expenses must continue to be reported on a P11D.

Come and speak to us if you have any problems claiming a dispensation. We have had years of experience negotiating with the Revenue on the kind of items that should be allowed in dispensations.

Acumen Tax Solutions
2 Purley Bury Avenue, Purley Oaks, Surrey CR8 1JB
Tel: 020 3669 5270 Mobile: 07813 582890 E-mail:

For information of users: Although every care has been taken in compiling this material, it only provides an overview and does not take the place of an individual consultation. We strongly advise all users to consult the detailed legislation or seek professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or this firm.

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