One thing that has definitely reduced for most businesses during Covid are expense claims. It remains a thorny issue though. The refurbishment of Boris Johnson’s flat at No10 at certainly caused some heated debate about expenses. So, how will things work though when we have a full return to the workplace for some but remote working for others?

The question is, where will the boundaries lie for expenses to be paid?

We’ve advised clients in the past on addressing issues with an employee expenses – we had an employee who thought there was nothing wrong with adding a Percy Pig Easter egg to his mileage reclaim, as they were of course on the same receipt, and then tried to justify it by saying it was a snack (in his view!).

We’ve seen an increase in many queries about paying for travel expenses to the office now for someone who has been working remotely. Is this a reclaimable expense? The short answer to that is, it depends on where their contractual workplace base is. And what about the ‘expenses’ of homeworking, for example, equipment, heating, electricity, phone and broadband bills?

So, what can employees claim as legitimate expenses and what do you want to pay for?

The usual principle is that, as an employer, you would normally cover the reasonable expenses that you would expect the employee to incur when carrying out their work for you. Common day-to-day expenses could be:

  • Travel – Employer’s should consider stipulating:
    • a pre-approval process
    • the most economic means of transport must be used
    • a specific class or category of transport
    • what applies to the use of loyalty cards, fuel cards, season tickets, etc. as applicable?
  • But not:
    • the expenses of travel between home and usual place of work (unless the employee’s base is at home, and they travel to a customer from home)
    • penalty fares or fines (in most circumstances)
    • Easter eggs bought at the same time as petrol!
  • Accommodation and Subsistence – Employers should consider stipulating:
    • a pre-approval process
    • a budget/upper limit which may be variable dependant upon location or accommodation
    • set out what meals can be claimed or provided for with a relevant budget/upper limit or a fixed amount
  • But not:
    • alcohol (or only a very limited amount of alcohol)
    • entertainment, unless entertaining clients
  • Homeworking – Employers should consider:
    • reimbursing a proportion of heating, lighting, general telephone costs (HMRC permit employers to pay up to £6 per week tax free)
    • reimbursing the cost of (or providing) a mobile phone or SIM card used mainly for business calls
    • reimbursing the cost of (or providing) other work equipment, such as tablets, computers, office supplies, office furniture, etc. to use mainly for business purposes
  • But not:
    • for unrestricted significant private use
    • the costs of a designer home office refurbishment!

As we re-engage in the workplace and enter a more agile period of working, now is the time to review your expenses and benefits and ensure your policies and procedures are fit for purpose. For more information on providing equipment at home, please get in touch with our Employment Law Solicitors.