P11d Dispensations - Notice of nil liability - May 2009
To avoid the submission of details of routine expenses payments and benefits that would clearly involve no extra tax liability the legislation provides for dispensation. If the employer satisfies HMRC that all the expenses he pays and benefits he provides would be fully covered by an expenses deduction a 'dispensation' may be given as long as the circumstances remain the same.
Where a dispensation is given, the Pay As You Earn scheme does not apply to the payments or benefits concerned. The employer need not show the particular payments or benefits on the annual return he or she makes to HMRC nor need the employee show them in his or her Tax Return.
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