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KPMG have published a document this week about a new HMRC plan for subsistence expenses. The idea is to create a standardised system, similar to that of a dispensation, which any employer can use without having to go to the trouble of applying for permission beforehand.

Although it's limited to just subsistence payments, it's a fantastic idea, not least because we here at Gabem have been pressing for this for a long time. The reason this development is such a positive step is because it creates a "level playing field" in the industry. It means that no matter who you work for the amount you can claim remains the same. This isn't a "carte blanche" affair, employers will still have to meet certain requirements to participate, the most basic of which is proof that an expense has been incurred.

In addition to the direct benefits to contractors and employees in general, there is a potential additional indirect benefit in the form of reduced running costs within HMRC itself. Administering dispensations is time consuming. They have to be negotiated set up and then applied to each company in turn. With the standardised system, fewer dispensations will be applied for and one rule will apply to everyone, reducing the amount of work it takes when processing. All of which will save us money in the long term, and we're all for that.

Hugo
05/03/2009