From April 2016 all employee expense Dispensations agreed with HMRC will cease to apply!
You will need new systems for checking expenses, HMRC will be supply examples.
Expenses which are not covered by benchmark scale rates are likely to paid and taxed via the payroll with the employee claiming relief through P87 and Self Assessment SA100.
You may need to submit form P11D(b) to report the amount of Class 1A National Insurance due on all the expenses and benefits you’ve provided. You should do this if:
you’ve submitted any P11D forms
you’ve been sent a P11D(b) form by HMRC
If you don’t submit any P11D forms, you can tell HMRC that you don’t owe Class 1A National Insurance by completing a declaration.
Due by 6th July 2015.
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 HM Revenue and Customs or pay tax or National Insurance on them. Here is a link to apply for Dispensations.
There are also Benchmark Scale Rates which can be paid tax free, alternative you can claim the actual costs
Dispensations are granted by HMRC for expenses and benefits and remove the need for P11D’s and P9D’s.
The main expenses routinely covered by a dispensation 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 subscriptions
Provided you have someone checking expense claims and the claims arent excessive, you wont need receipts.
Its worth getting your dispensations now rather than applying in the new year as if you dont get them before April you will end up filling in P11D’s and P9D’s.