Hello - I am currently working part-time as a jack-of-all trades for a new charity.  I've agreed to do the book-keeping as a result and feel that I'm in a bit over my head with the P11D having never filled one out before.

We have a dispensation notice in place and it fortunately covers most of the expenses our one employee has.  However, it does not currently cover per diem payments (we have since applied for this to be added) and I'm very confused how to treat these.

I sought the advice of the person who issued our dispensation notice and he advised us to submit a letter with the P11D indicating that the per diems are designed to do no more than meet the expenses incurred and that no tax liability should arise. (the amount she receives is below the FCO guidelines).  The reason we pay per diems is because she is travelling to 3rd world countries where obtaining receipts is a challenge at best.

For example when she travels to Ethiopia we pay a total of £31 per day - £10 in incidentals and the balance to cover meals.  Nothing is receipted.  The incidental value remains the same whereever she travels but we do scale the meal amount.

What I'm unclear on is

a) do I include the incidentals value in the Travelling and subsistence payments box?

b) although it has not been run through PAYE (as I now understand that it probably should have), should the "cost to you" box and the "Amount made good" box be the same value so the resulting taxable payment is nil?  (based on there being no tax liability per above?)

Apologies if any of this is unclear but I'd be most grateful for any advice!