Right now the HMRC is promoting the virtues of gaining
dispensation from the reporting of some expenses and benefits.
The requirements of the dispensation are that you have in
place an independent expenses system such as MyExpensesOnline, recording the
details of the expenses and retaining copies of the receipts.
Applying for the dispensation is relatively easy. Filling in
and filing the form P11DX
will get you on the way; you can ask for it to be backdated to the start of the
current tax year.
Once dispensation has been granted, the checking required
will very much depend upon the size of the business. HMRC will be looking for
evidence that someone other than the claimant incurring the expense is
responsible for ensuring that the claim relates to valid travel and subsistence
expenses, and does not include disallowable items, and is not excessive.
At the moment you may require every item claimed to be
backed up with a receipt to ensure it has been incurred, and for audit purposes.
However, interestingly, for small expenditure such as small allowances for taxi
fares, HMRC will not necessarily require these receipts. They will, however,
ask you to show that regular checks are made to ensure that only allowable
expenses are being reimbursed.
HMRC require you to keep the expenses records, including the
receipts. The good news is that the time that you need to keep them is only a
(minimum of) three years after the tax year that they relate to, in line with
The good news is that using MyExpensesOnline enables you to
confidently apply and gain this dispensation. It ensures that all of your
claims are correct, backed up with receipts and are retained for as long as you