P11Ds - how can I reduce the burden?

I’ve just submitted forms P11D and P11D(b). My P11Ds mostly cover reimbursed expenses, so as you can imagine, they’re very fiddly and time-consuming. Is there any way I can reduce the paperwork and preparation time?

1st May 2014

You could apply for a dispensation (or form P11DX) from HMRC. If you are successful, this form completely removes the requirement to report reimbursed expenses on form P9D or P11D.

There is a list of expenses that can be covered by dispensations, but examples of expenses typically covered are:

  • Travel, including subsistence costs associated with business travel
  • Fuel for company cars
  • Hire car costs
  • Telephones
  • Business entertainment expenses
  • Credit cards used for business
  • Fees and subscription

Put simply, to stand a chance at obtaining a dispensation, you must have an independent system in place for checking and authorising expense claims so as a minimum, someone other than the employee must check their claim. If you are a sole director, you may still be successful, provided that you obtain receipts for all expenditure and the expenses are within the list referred to above.

A dispensation covers these items indefinitely, however, HMRC reviews them regularly (usually at intervals of five years or less) to make sure the conditions under which it was granted still apply. Please note, a dispensation may not completely negate the requirement for P11Ds though. So if benefits in kind are provided, such as a company car, you will still need to complete forms P11D and P11D(b).

If you would like assistance in applying for a dispensation or would like to discuss another tax or accountancy related matter, please do not hesitate to contact your local TaxAssist Accountant.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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