Flat rate expenses

JodieR

Lots of questions this week I'm afraid!

A payroll client of mine gets funding to employ people to care for her disabled daughter. There's one lady who's now going to start taking the daughter out a couple of times a week, to garden centres and parks and other such places. My client wants to give this employee an extra £5 per outing to cover getting themselves a small refreshment. As they're not leaving before 6am in the morning or staying out for over 10 hours it doesn't immediately meet the conditions for flat rate expenses payments, but do you think there's any point writing to hmrc and asking if it can be treated this way? I was going to get her to fill in a dispensation form anyway so should I try send a covering letter with that? Or will she just have to keep her receipts and claim just what's actually spent?

Jodie

groundy

My initial response would be to refund what is spent, however it may be worth writing to HMRC to clarify.

JodieR

Thanks, yes, i see that in some ways it would be easier to just refund what's actually spent, but it does make the whole process extra fiddly - and what if one day £4 is spent and the next time it's £6 - if it's capped at £5 per day then the carer has lost out despite it being an average of £5 per outing. It's much simpler for me when I'm processing the wages to add on £5 per outing onto her (net) pay, and it makes it easier for the carer not having to worry about getting all her receipts in on time.
After half an hour of being passed around HMRC yesterday I was told to submit a dispensation application with a covering letter and hopefully they'll agree to the £5 round sum and say that it doesn't need to be taxed or declared anywhere.

Monsoon

JodieR wrote: »

After half an hour of being passed around HMRC yesterday I was told to submit a dispensation application with a covering letter and hopefully they'll agree to the £5 round sum and say that it doesn't need to be taxed or declared anywhere.

Sounds like the most sensible thing - good luck!!