Expenses Dispensation Explained

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Expenses Dispensation Explained

A dispensation is a concession given by HMRC to umbrella employees, and their employer, with the sole purpose of reducing the overhead of preparing detailed expense reports. It is not an opportunity for IT contractors to make money on expenses, no matter what others may tell you.

Claiming Expenses with Drole

Here are the various amounts we can claim on your behalf, and legitimately reduce your tax bill, under our HMRC dispensation, but you still need to keep receipts for tax purposes.

1. Travel

  • To and from your client site (Provided your contract does not run for more than 2 years at the same site)
  • Travel on specific business trips at the request of your client.
  • Parking, Tolls, and Congestion Charge (but not fines)

Car travel is reimbursed by HMRC mileage rates, and all other travel is reimbursed at cost against receipts.

2. Subsistence:

  • Incidental expenses whilst working at the client site - £5.00 per day.
  • overtime meal claims (with receipts/claim form) - £15.00 per night.
  • contribution to home utility bills (home-based worker) - £13.00 per month.

3. Telephone:

  • Cost of any itemised business calls on your home phone bill. (not line rental or VAT)
  • All costs of your business mobile and broadband internet connection

4. Purchase of Assets

Contractors can claim VAT and Tax relief on business purchases, such as Laptop, Desk, Office chair, cabinet, and Mobile phone.

5. Work related training courses

Any professional updating and job- or contract-related courses

6. Incidental Expenses

These could be subscriptions to professional associations, consumables such as stamps, stationery, photocopying, carriage, and others ...

Click here for a refresher on the tax treatment of expenses

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remember that whatever out-of-pocket expenses you submit, the Drole systems always ensure that you're reimbursed just as soon possible - there are no artificial delays