A template policy under which a company in England & Wales reimburses employees for expenses that are necessary, reasonable and incurred for a genuine business purpose.
How to use this template - Replace every
[SQUARE-BRACKET]field before use. - Tax matters: genuine business expenses reimbursed to employees are generally not taxable, but some payments are treated as taxable benefits. Follow current HMRC rules (for example, the approved mileage rates) and keep records. Take accountancy advice if unsure. - Keep this policy consistent with your contracts and other staff policies. It does not form part of the contract of employment and may be amended.
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[COMPANY NAME] Business Expense Reimbursement Policy
1. Purpose and scope. This policy explains how [COMPANY NAME] reimburses employees for expenses properly incurred in the course of their work. It applies to all [employees / workers].
2. General principle. The company reimburses expenses that are necessary, reasonable, appropriate and incurred wholly for a genuine business purpose. Expenses must be supported by valid receipts and approved in line with this policy.
3. Allowable expenses (examples).
- Travel on business (rail, air, taxi where reasonable), excluding ordinary home-to-work commuting.
- Mileage for use of a personal vehicle on business, paid at HMRC's approved mileage rates.
- Accommodation and subsistence (meals) while away on business, within any limits set out in Schedule 1.
- Reasonable client entertainment where pre-approved.
- Other expenses necessary for the role, where pre-approved.
4. Expenses not reimbursed (examples). Personal expenses; fines and penalties; ordinary commuting; alcohol beyond reasonable limits; and anything not supported by a receipt or not for a business purpose.
5. Approval and limits. Expenses [over £[AMOUNT]] require prior approval from [ROLE]. Spending limits are set out in Schedule 1.
6. Making a claim. Submit claims on the company's expense form within [NUMBER] days of incurring the expense, attaching itemised receipts. Claims are paid [with the next payroll run / within [NUMBER] days of approval].
7. Records and tax. The company keeps expense records as required by HMRC. Where a reimbursement is a taxable benefit, it will be reported and taxed accordingly.
8. Misuse. Submitting false or inflated claims is a serious matter and may be treated as misconduct under the disciplinary procedure.
9. Review. This policy is reviewed every [NUMBER] months and may be amended. It does not form part of any contract of employment.
Note: complete Schedule 1 with your own limits and rates, and confirm current HMRC mileage and subsistence figures before publishing.
--- This template is a starting point and not legal or tax advice. Confirm current HMRC rules and have a qualified adviser review before use. Governing law: England & Wales.
[DRAFT - requires solicitor / accountant review before use]