Agreeing with HMRC bespoke rates for expenses

Produced by Tolley in association with Robert Woodward
Agreeing with HMRC bespoke rates for expenses

The following Employment Tax guidance note Produced by Tolley in association with Robert Woodward provides comprehensive and up to date tax information covering:

  • Agreeing with HMRC bespoke rates for expenses
  • HMRC approval to use advisory benchmark or bespoke scale rate payments
  • Random sample
  • Revocation
  • Relaxation of checking procedures

There is a mechanism to agree bespoke scale rates with HMRC in relation to the exemption for expenses matched by an allowable deduction (see the Expenses and benefits matched by allowable deductions guidance note).

In order to obtain agreement to use scale rate payments or subsistence allowances, the employer will need to demonstrate to HMRC that someone other than the employee incurring the expense is responsible for ensuring that the allowances claimed relate to qualifying travel / subsistence and will also need to satisfy HMRC that the allowances are not ‘excessive’. Where all expenses are expected to be supported by receipts, it is unlikely that HMRC would request a sampling exercise.

HMRC approval to use advisory benchmark or bespoke scale rate payments

If the employer applies to HMRC to bespoke use scale rates / subsistence allowances for the purposes of the exemption for deductible expenses, HMRC expects the employer to:

  1. keep sufficient records to be able to demonstrate that the employee:

    1. was entitled to the scale rate payment

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