You Can Claim Expenses Without Receipts
26 Jun 2008
In certain circumstances it may be possible to claim expenses from your employer and not be required to include a formal receipt.
New guidance has been published by HMRC which empowers employers to set scale rates for particular expenses. Where these scale rates are agreed, employees can claim them without the normal requirement to produce a receipt.
Examples illustrated by HMRC's web site include subsistence payments and cleaning of protective clothing or uniforms.
The following notes outline some of the issues that need to be considered when setting scale charges that will qualify under this concession.
- It is only possible to claim the scale charge when the underlying expense has been incurred. For example if a daily subsistence allowance was paid, irrespective of the employee actually incurring subsistence expenditure every day, HMRC would treat this as a payment of earnings and tax it accordingly
HMRC intend that scale rate payments only cover expenses which are:
- incurred and for which it is often difficult to get receipts
- Scale rates should be set at "modest" levels - at an amount that will be enough to cover the relevant expense
- Scale rates must be agreed with HMRC before any payments are made to employees
HMRC make suggestions for a process of sampling in order to quantify the level at which scale rates are set.
If your reimbursements are significant, it may simplify your accounting if you consider introducing scale rates for appropriate expenses. If so, JSA can help, although please be aware that our time spent in helping you obtain such “dispensations” is not covered by your regular monthly fee.
A "tasty" footnote: Whilst researching this article we came across the following HMRC directive regarding claims for subsistence, in particular a claim for the cost of sandwiches/packed lunch if working away from your regular work place on a temporary work site. If you make yourself a pack-up lunch using your domestic supplies, your employer cannot reimburse the cost of the food tax-free, nor can you make a claim on your tax return if you are not reimbursed. If however you purchase a ready-made sandwich, this cost can be reimbursed or a claim made on your tax return!
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