“The scandal over MPs expenses has brought the issue into sharp focus,” says Edwards, head of employment law at Mace & Jones. “Entrepreneurs must spell out – in black and white – what can and cannot be claimed on expenses in their company policy.
“Make sure people don’t abuse the system," he continues. "Make regular routine checks and compare how much staff are claiming. This should help identify people who are using expenses irresponsibly or excessively. You should also drill into certain expenses, which may be regarded as ‘perks’ such as meals and travel. Are these dinners, lunches and visits generating business for the firm or are employees just taking the business for a ride?”
According to research by Globalexpense – based on nearly five million expense sheets from over 100,000 employees in 140 companies – fraudulent expense claims account for £350m while another £670m should never have been paid because the items were not covered by company policy. The total outlay was an estimated £5.8bn last year.
Examples listed in the survey include the purchase of 20 bibles and a visit to a strip club in the US. Claims for haircuts were common, and one employee submitted a betting slip as a receipt.
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