EIM30225 | Exemption for amounts which would otherwise be deductible: removal of checking requirement from 6 April 2019

S289A(2A) and s289A(4A) ITEPA 2003

From 6 April 2019, the legislation at s289A ITEPA 2003 is being amended. Employers will no longer be required to check receipts or other forms of documentary evidence of the amounts spent by employees when using the HMRC benchmark scale rates to pay or reimburse their employee’s qualifying subsistence expenses free of tax.

Section 289A(2A) ITEPA 2003 contains a new exemption for expenses in the course of qualifying travel that have been paid or reimbursed in accordance with regulations made by the Commissioners for HMRC, subject to a new Condition C, which stipulates a lower checking requirement. Both benchmark scale rates and overseas scale rates will be covered by this new legislation. The exemption will not apply if the payment or reimbursement is offered in conjunction with a relevant salary sacrifice arrangement.

Section 289A(4A) ITEPA 2003 contains the further condition, Condition C, allowing payments or reimbursements of expenses to be made with a lower checking requirement. This condition requires employers to operate a system for checking that employees were engaged in qualifying travel in relation to the amount paid or reimbursed.