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Expenses introduction

The guidance note deals with the PAYE treatment of expense payments made by the employer as well as how an employee may claim expenses which are not reimbursed.

Depending on the nature of the expenses and how they are met, there may be reporting requirements to HMRC as well as potentially both tax and NIC liabilities on those amounts. See Simon’s Taxes E4.420 and HMRC guidance at EIM01110 and NIM05000.

Expenses ― signposting guidance

There is a large range of expenses. For a useful A-Z guide of expenses and benefits with brief details on the tax and NIC treatment as well as the reporting requirement, see the A–Z of benefits in kind and expenses payments guidance note. HMRC guidance can be found in CWG2, Chapter 5.

There are a range of guidance notes on specific areas of expenses which come up regularly. Some of these are listed below for convenience:

1. •

   Travel expenses

2. •

   Subsistence expenses

3. •

   Incidental overnight expenses

4. •

   Overseas business expenses

5. •

   Fixed deductions for expenses

6. •

   Round sum allowances

For