Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

Dispensations: dealing with requests

Form P11DX

The guidance on this page applies for the tax years up to and including 2015-16.  For tax years 2016-17 onwards dispensations have been replaced by an exemption for amounts which would otherwise be deductible. See EIM30200 onwards.

A revised form P11DX has been available at since April 2006. This replaces the old form P11DX that had four tick boxes and the associated leaflet IR69.

The new form requests more information that the previous version and in most cases this should provide enough information to enable HMRC to decide whether to agree to issue of a dispensation but there will still be occasions where more information may be sought from an employer to support the application for a dispensation.

When granting a dispensation make clear in the letter accompanying the dispensation sent to the employer the fact that the dispensation is limited to the facts and circumstances disclosed by the employer.

In cases where you feel it is necessary to ask the employer for further details of its processes for dealing with expenses and benefits, these enquiries should be limited to the minimum necessary to deal with the dispensation request. Do not ask unnecessary questions or require lengthy answers from the employer where a straightforward response, perhaps on a yes/no basis, would do. You should restrict your questions to issues, such as the reimbursement of subsistence expenses, where there is a clearly identifiable risk of a potential loss of tax.

In general, do not take requests for a dispensation as an occasion for a compliance review unless the information provided by the employer indicates that there may be substantial unassessed tax liabilities.

Where a dispensation is refused, clearly state the reason in the letter sent to the employer. Should the employer decide to amend his procedures, in such a way as would enable a dispensation to be granted, encourage him to make a further request when his procedures have been changed.

Examples of the type of letter to be sent on giving a dispensation, the dispensation notice itself and the type of letter refusing a dispensation are given in EIM30085.

Where the dispensation relates to a subsidiary employment, full particulars of the dispensation or any subsequent variation should be notified to the tax office that deals with the main employment.

Annual increase in amounts included in a dispensation

Where expense payments included within a dispensation are set at a particular amount (e.g. scale rate payments - EIM05200), the amount may be uprated annually by the employer without the need to seek HMRC’s agreement, as long as the annual increase is equal to or less than the annual increase in the Consumer Prices Index (CPI) for the same period.