HR · 2 August 2017

Eight unusual employee expense claims contributing to a £1.6bn economic black hole

blue selective focus image of till receipts
40 per cent of workers overcharged on expenses after feeling underpaid

UK business owners have been warned to take a tougher stance on unrealistic employee expense claims, as new research reveals a majority frequently overcharge at the end of the month.

In a study of 1,000 working professionals across Britain, by Allstar Business Solutions, almost three-quarters of respondents said they spent up to £100 every month on business expenses. However, a majority admitted to overcharging their employer by ten per cent at the end of the month.

Meanwhile, a quarter of workers said they charged their boss an extra 20 per cent each time an expense claim was submitted.

Despite the illegality of incorrect claims, over four in ten believed they weren’t doing anything wrong.

Overall, the culture of overclaiming on business expenses could be costing the economy £1.6bn every year in lost revenue, the research suggested.

For 40 per cent of respondents, a feeling of being underpaid was the driving factor. However, over a third said they were claiming fairly having lost previous receipts.

Perhaps most worryingly for employers, a third believed they were just following typical practices around their company.

Commenting on the research, Paul Baker, vice president of customer management at Allstar Business Solutions, said the “shocking findings” were a “big problem” for business owners.

“Not only is it costing individual companies, it is also having a much bigger impact on our wider economy as a whole and people don’t seem to care that it is both dishonest and illegal,” he added.

Eight unusual employee expense claims received by employers

  1. Flowers
  2. Alcohol for personal use
  3. Haircuts
  4. Home improvements
  5. Personal groceries
  6. Personal parking fines
  7. Meals which weren’t business related
  8. Hotel breaks with the family

An generational divide was also noted. A third of workers in the 18 to 34 years old bracket admitted to overclaiming in the last year, compared to just 15 per cent of those over 55.

Baker warned that productivity could also be suffering: “We found that 80 per cent spend between one to two hours a month working on their expenses claims each month. Those hours spent processing could be better spent working on more productive tasks.”

Business sectors most likely to see overcharged claims

  1. Creative arts                                                    50 per cent
  2. Energy and utilities                                       45.5 per cent
  3. Information, research and analysis           40 per cent
  4. Environment and agriculture                      35.7 per cent
  5. Business, consulting and management    28.6 per cent

Read our guide to implementing an effective small business staff expense policy

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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