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Audit requirements

Even though there is a dispensation it does not mean that there is no audit requirement – if anything the audit has to be more comprehensive as forms P11D are not being submitted to HMRC.

The employer should be able to demonstrate that regular checks are undertaken to ensure that only allowable expenses are being reimbursed. It is, therefore, essential for the  audit to be approached from two angles – one – is the expense allowable and  – two – is the documentary evidence there to prove that the expense has been incurred.   If no documentary evidence is available then a note made at the time should suffice. HMRC will not normally be concerned about trifling amounts but will expect that a note was made at the time. An employer will normally require every item of expenditure to be vouched for his own benefit – to ensure it has been incurred and for audit purposes.  All allowable expenses need to be supported by documentary evidence – the exception is where the benchmark or other scale rates are being paid. Here there is still an audit requirement – see the drop down menu under meal allowances – or click here .