HMRC have published the ever popular Expenses and benefits guide 480 for 2016-17.
From April 2016, the benefits rules apply to directors and employees alike, with no exemption for the previous £8,500 rule.
As a consequence, all dispensations issued in the past, to exempt declaration of certain “benefits” will no longer apply.
Chapter 2, paragraph 2.1 says:
From 6 April 2016, all dispensations cease to exist. Almost all expenses or benefits that might previously have been covered by a dispensation will be within an exemption and will not need to be reported. Where the employer is satisfied that all the expenses and/or benefits they provide would be fully covered by the expenses exemption they do not need to show these on forms P11D.
Common items that will be covered by the exemption include:
- travel, including subsistence costs associated with business travel
- business entertainment expenses
- credit cards used for business
- fees and subscriptions
The exemption does not apply to expenses or benefits that are paid or provided under a salary sacrifice agreement.
Regarding the common items now included within the exemption, what a relief.
Chapter 10, paragraphs 10.2 and 10.3 also catch the eye. They say:
10.2. A deduction or an exemption for the spouse’s expenses might be admissible if the spouse has some practical qualification directly associated with the employee’s mission which she or he uses to assist the employee regularly during the trip. For example, as a competent linguist the spouse acts as translator at business meetings, when otherwise an outside interpreter would have been required. A spouse’s expenses might also be allowed where the employee’s health is so poor that it would be unreasonable to expect him or her to travel alone.
10.3. Where the spouse’s presence is for the purpose of accompanying the employee at business entertainment functions, the expenses of the spouse’s trip will first need to be considered under the rules, outlined in Chapter 20, about entertainment. If a disallowance for the expense is made in calculating the employer’s tax liability, a deduction or exemption may be available under the ordinary expenses rule where the spouse’s presence is essential in order to act as host or hostess at a series of business entertaining occasions which the employee is required to organise as part of the duties.
Food and drink for thought?