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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: settlement: exemption for amounts which would otherwise be deductible

Including expenses on forms P11D, which could be covered by an exemption for amounts which would otherwise be deductible (EIM30215), can be

  • a burden for the employer
  • a burden for an employee who has to declare them and make a claim, and
  • a lot of extra work for HMRC in processing the forms.

Although expenses covered by this exemption do not need to be returned on form P11D the employer should still maintain adequate records relating to the calculation and payment of these expenses.

Where the employer decides that the exemption applies you should

  • make sure the employer’s systems are adequate, for example, receipts are retained, claims are countersigned or adequately reviewed
  • deal with any problems
  • advise the employer that if they make any changes to expenses payments paid they will need to reconsider whether the exemption still applies.