Dispensation

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jewels.p
jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
in AAT Level 4 (Level 8 in Scotland)
If it states that a dispensation is in force do we still need to include the expenses when we are preparing the computation of taxable income?

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  • koda
    koda Registered Posts: 52 Regular contributor ⭐
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    No if it says there's a dispensation you can exclude it completely from your tax return and any computations. If there are expenses without a dispensation that are classed and allowable and re-imbursed by the employer then this is added on as a benefit and then taken off again as an allowable expense.
  • taskey
    taskey Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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    what kind of despensation could it be and where would it appear? my book says nout about dispensations
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
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    taskey wrote: »
    what kind of despensation could it be and where would it appear? my book says nout about dispensations
    In an example in my osborne book it refers to susbistence being claimed by the employee but the company has a dispensation in force to cover travel and subsistence. Therefore do not class it as a benefit.
  • koda
    koda Registered Posts: 52 Regular contributor ⭐
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    It's kind of an agreement the company has with HMRC over allowable expenses and they agree in advance that they will only pay for allowable expenditure. It's for stuff like travel for business (maybe a train ticket or something) and expenses that are wholly, exclusively and necessarily for the duties of employment.

    It'll be in the benefits in kind section if it appears anywhere and basically if they say £x amount was re-imbursed by the employer and a dispensation is in force, it basically means you can just ignore it and leave it out of the tax computation all together.
  • taskey
    taskey Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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    excellent, thanks

    i have a question i have asked elsewhere and not yet got an answer. on the total tax income liabilty the amount for property is £3290, but then the personal allowance has been taken off, so the total tax liabilty is NIL - where does the personal allowance come from?
  • koda
    koda Registered Posts: 52 Regular contributor ⭐
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    Is there any other income like employment income or just property as main income? If it's just property I should imagine it's you £6,475 personal allowance and as the £3,290 is below that, it's reduced to nil.
  • taskey
    taskey Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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    no i have worked out the taxable gain for the year from the previous question, then this one on property.

    i will carry on and see if the next on is the same, thanks

    tracy

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