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Expense Policy Template & Update

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Every business has to pay their employees expenses in order to operate. You must ensure that you have an effective expense policy that will help you keep control of your costs and that will also adhere to tax and NIC legislation. Many businesses have poor controls that can lead to spiraling costs, extremely punitive measures being taken by HMRC when they audit you, and even employee fraud.

With HMRC having changed their modus operandum to examining policies instead of actual records before deciding to undertake an Employer Compliance Review it is imperative for businesses to update their expenses policies to ensure that enough information is provided on the following common problem areas are covered:

  • Business Travel – differentiating between taxable ordinary commuting costs to Permanent Workplaces and allowable journeys to Temporary Workplaces.
  • Entertainment costs – differentiating between Staff, Business & mixed use entertaining i.e. part subsistence/part staff entertaining
  • Accommodation & Subsistence costs – including Hotel stays, Staying with friends and family, conditions for claiming meals, spousal travel, tipping, overnight incidental expenses etc
  • Company funded events – including Corporate days, Annual functions Retirement parties etc
  • Other allowable expenses – Eye Tests, Trivial Benefits,
  • Corporate credit card use – how to account for the private use of a corporate credit card
  • VAT guidance – Level of detail required to reclaim VAT, including petrol receipts, car parking etc

If you present HMRC with a thorough expenses policy that covers all of the above areas, HMRC will assume that you are paying all of your expenses correctly and will not waste their limited compliance resource in conducting an Employer Compliance Review on your business. Instead they will move onto another company with more lax procedures.

Our consultants can either supply you with a template policy that covers all of the above problem areas or we can help you to design a bespoke expense policy tailor made to exactly suit your individual business requirements.

Fill in your details below to receive a callback to discuss your requirements on a no obligation basis.


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