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CLAUSE
58: MILEAGE ALLOWANCE: NIL LIABILITY NOTICES
SUMMARY
1.
Nil liability notices, commonly known as dispensations, are issued
to employers by Inspectors of Taxes in relation to expenses payments
and benefits that will not create a tax liability. This saves unnecessary
reporting.
2.
With the introduction of new approved mileage allowance payments that
will be tax exempt, dispensations will no longer apply to payments
to an employee for using their own vehicle for business travel.
DETAILS OF THE
CLAUSE
Subsections
(1)-(2) provide that where mileage allowance payments are paid or
mileage allowance relief could be claimed then dispensations shall
no longer apply. Any dispensations issued prior to April 2002 shall
no longer have effect in relation to business travel in an employee’s
own vehicle. Any other elements in a dispensation are not affected.
Subsection
(3) defines the notices that are affected by this section.
Subsection
(4) provides that "business travel" and "company
vehicle" have the same meaning as in new Schedule 12AA Taxes
Act 1988 (see Schedule 12 of Finance Bill), and that "mileage
allowance payments" has the same meaning as in new section 197AD
of Taxes Act 1988 (see clause 57)
BACKGROUND NOTE
Nil
liability notices, commonly known as dispensations, are issued to
employers by Inspectors of Taxes in relation to expenses payments
and benefits that will not create a tax liability. This saves unnecessary
reporting.
Dispensations
can cover any type of expenses payment whether in cash, vouchers or
by credit card.
Following
the introduction of the new system of approved mileage allowance payments,
set out in clause 57, these types of payments are taken out of the
ambit of existing dispensations.
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