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HMRC Dispensation and Umbrella Companies

A dispensation is simply a working agreement between a company and HMRC. It is a cost saving mechanism for HMRC that helps them reduce the number of tax inspectors.

  • A dispensation does not benefit a contractor.
  • A dispensation does not mean less paperwork for a contractor.
  • A dispensation does not affect what a contractor can claim as a legitimate business expense.

A dispensation is, primarily, a means of reducing HMRC paperwork, through estimating the value of multiple small transactions - rather than itemize every single penny throughout the year.

HMRC Dispensation Process & Procedure

A dispensation benefits a company that is unable to effectively process, record & manage a large volume of data transactions.

Contractors Umbrella Company has sophisticated bespoke software that is capable of handling millions of individual transactions at any one given time, and regardless of the sums involved so we do not use the dispensation approach. We elect to validate each expense and financial transaction utilities our cutting edge systems. The result is that contractors using our umbrella company solution enjoy a greater level of compliance and almost zero chance of tax queries from HMRC

Who Benefits from a HMRC Dispensation?

  • A dispensation benefits HMRC
  • A dispensation benefits a company
  • A dispensation does NOT benefit a contractor.

Umbrella Company Best Practice

  • Contractors Umbrella Company accounts for every penny
  • Contractors Umbrella Company automated systems protect contractors
  • Contractors Umbrella Company validates expenses
  • Contractors Umbrella Company approach provides better control and a better service than a dispensation