The government's business portal explains the work-related costs scheme: employers may spend a percentage of the total wage bill on untaxed allowances and benefits, the discretionary margin, alongside targeted exemptions for things like travel and home-working allowances. Overshoot the margin and a final levy of 80 percent applies.
In practice the scheme fails in administration, not in intent: benefits booked on the wrong ledger accounts, no running total against the margin, and a surprise at year-end. Label costs that fall under the scheme in the bookkeeping as they happen and the scheme becomes what it was meant to be, a modest tax-free budget you actually control.