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Practical issues

12 October 2006 / Paul Tucker
Issue: 4079 / Categories: Comment & Analysis , Employees , Income Tax
PAUL TUCKER looks at the practical issues surrounding PAYE dispensations, and how they save time for employers.

ALL ADVISERS SHOULD be aware of dispensations but many will have received the following response when asking a client for a copy of a dispensation letter: 'oh it's somewhere but we are not sure where!' That answer is unlikely to be appreciated by HMRC. In addition if a copy cannot be found how does the adviser know that the employer is operating it in the  correct way?
All benefits and expenses must be shown on the form P11D unless the expense is covered by an exemption or HMRC practice. Some employers believe that if an expense is a pure business expense it does not need to be shown on the form. That view is not correct; if the employer does not have a dispensation then all expenses must be included even if ultimately no tax will be due.
ITEPA 2003 ...

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