One third of expense claims made in the UK (both by number and value) are for business travel, whether mileage, flights, trains and taxis. GlobalExpense estimates that 3.8m UK employees made business travel claims in 2010 costing UK organisations £3.5bn.
While it is debatable whether the economy is out of the woods, it has certainly stopped contracting and businesses can expect to see their travel expenses increase in the coming years – maintaining scrutiny and ensuring claims are within policy will be important if this cost isn’t going to bounce up again as improved economic conditions and budgets encourage bigger claims.
About half of business travel claimants are conducting regular (more than once per month) business trips. The majority of these claimants will be conducting a vast proportion of this travel in their own vehicle or one supplied by the company and will thus incur a fuel cost.
This gives organisations a twin headache. Firstly, how to deal with, and scrutinise, a large volume of claims from a wide range of employees - some of which may be inaccurate, fraudulent or simply not in accordance with your policy. Secondly, dealing with the employees who submit large volumes of expense items – where a single person may be incurring large costs for the company through the size of their claims.
Mileage expense claims have always been a process loved and hated in equal proportions throughout businesses. To be 100% accurate, employees have to be constantly on top of their administrative duties. Likewise, verification of claims being put through the business is a time consuming and difficult task. It is incredibly difficult to verify the accuracy of a mileage expense for. Did the driver travel that exact distance, was the entire trip for business purposes or did the journey even take place at all? It is much easier for the Tax Authorities to question the accuracy of a claim. The burden of proof then sits with the employer and employee.
Most of us will have, or still do, work in an organisation where there is an excepted culture of submitting inaccurate, estimated or 'cooked' mileage claims. Some of us will even have taken advantage of a weakness within your company's internal process. We do not cover our tracks as well as we think. HMRC know what they are looking for. Mileage expense claims are within the 3 most commonly audited financial processes.In a sector worth £1.4bn, just a little extra control will accuracy, integrity and most importantly, substantial savings.
- Lower fuel expense claims
- Increased inefficiencies
- A 100% tax complaint system