You may be able to get a dispensation and get it online
Our newsitem of 26 January 2010 explained how to apply for dispensations online. HMRC has now updated its general guidance and it seems clear that you can claim the dispensation, online if you wish, even in the case of a one person company.
Having a dispensation will not only improve the accuracy of employee code numbers but tax accountants may be able to offer additional ongoing services to clients who currently do year-end employer forms themselves.
The new HMRC guidance says under ‘Systems you must have in place' that:
‘You must have an independent system in place for checking and authorising expenses claims. At a minimum, this means having someone other than the employee claiming the expenses check that:
- the amount claimed isn’t excessive
- the claim doesn’t include disallowable items.’
If a one person company uses its external accountant to compile or check the accounts and complete forms P35 and P11D, and ensures that such expenses and other benefits-in-kind are shown correctly in the accounts and are returned correctly on the required forms, then this represents ‘an independent system for checking’. In this case the answer to the question in the HMRC guidance is ‘Yes’.
Yes is also the answer to the question in the online application for a dispensation:
‘Is there a process of independent checking in your company? For example does more than one person always examine claims to verify that they do not include items which are not allowable under the tax/National Insurance contributions legislation?’
If you apply for a dispensation now this can have effect for tax year 2009-10, provided you have all the necessary paperwork to verify the expenses.