Rules for business expenses
In general, something only counts as a business expense if your employee needs it to do their job. You do not have to deduct or pay tax and National Insurance on qualifying business expenses, but you need to make sure that they meet all of HM Revenue and Customs’ (HMRC) criteria for:
Costs relating to business travel also count as business expenses, unless the travel is in the employee’s own vehicle.
For more details, see the guides on:
What to report and pay
You must report the cost of the expenses on form P11D. You do not need to deduct or pay any tax or National Insurance.
Some business expenses are covered by exemptions (which have replaced dispensations). This means you will not have to include them in your end-of-year reports.