Employee expenses policy

Responsibility for determining whether business expenses reimbursed to employees and directors are exempt of tax and NI rests with the employer. To aid with this it’s good practice to have an expenses policy in place.

Evidence of a legitimate claim

HMRC wants to know that you have a good system in place to ensure that only expenses which are reimbursed for genuine business reasons are paid tax and NI free. Our policy covers all the rules and requirements for legitimate claims, such as prior authorisation and provision of VAT receipts. HMRC will also want to see that the expense claims are always authorised by someone other than the claimant.