As an employer, you can apply for a dispensation on some expenses and benefits you provide for your employees. This means you won’t need to report them to HMRC or pay tax or National Insurance on them.
Apply for an exemption from reporting expenses and benefits that your employees don’t have to pay tax on
Dispensations cover routine business expenses and benefits like:
- phone bills
- company car fuel
You need to tell HMRC if anything youve included in a dispensation changes. If you dont, it might be cancelled and youll have to pay back any tax you owe.
When to apply
You can apply for a dispensation at any time, and it will normally take effect from the date it’s issued.
However, you can ask for it to be backdated to the start of the current tax year if you were already providing the expenses and benefits it covers.