Expenses Policy Template
Free business expenses policy template for UK employers. Travel, subsistence, and expense claim guidelines.
Use this template to create an expenses policy.
Expenses Policy
[Company Name]
Policy Owner: [Finance/HR] Last Reviewed: [Date] Next Review: [Date]
1. Purpose
This policy sets out the rules for claiming reimbursement of expenses incurred on Company business. It ensures fair, consistent treatment and proper use of Company funds.
2. Scope
This policy applies to all employees who incur expenses on behalf of the Company.
3. General Principles
- Only genuine business expenses will be reimbursed
- Expenses must be reasonable and necessary
- Prior approval should be obtained where required
- Receipts must be provided for all claims
- Claims must be submitted promptly
- The cheapest practical option should be chosen
- Fraud will be treated as gross misconduct
4. Travel Expenses
4.1 General Travel
| Mode | Guidelines |
|---|---|
| Public transport | Standard class unless prior approval |
| Taxi | Only when no reasonable alternative |
| Air travel | Economy class; book in advance |
| Car hire | Prior approval required |
4.2 Mileage
When using your own vehicle for business travel:
| Engine Size | Rate per Mile |
|---|---|
| Cars and vans (first 10,000 miles) | [45p] |
| Cars and vans (over 10,000 miles) | [25p] |
| Motorcycles | [24p] |
| Bicycles | [20p] |
Notes:
- Commuting (home to normal workplace) is not reimbursable
- The claim covers fuel, wear, and insurance
- You must have business use insurance
- Passengers: additional [5p] per mile may be claimed
4.3 Parking and Tolls
Reasonable parking charges and road tolls incurred for business travel will be reimbursed with receipts.
5. Accommodation
5.1 Hotels
| Location | Maximum Per Night |
|---|---|
| London | £[150] |
| Other UK cities | £[100] |
| Outside UK | As approved |
- Book through [approved provider/booking system] where possible
- Standard rooms only unless unavailable
- Receipts required
5.2 Overnight Stays
Overnight accommodation is appropriate when:
- Early start or late finish makes travel impractical
- Journey would be over [2] hours each way
- Cost is less than alternative travel
6. Meals and Subsistence
6.1 Meal Allowances
When travelling for business:
| Meal | Maximum |
|---|---|
| Breakfast (if away overnight or early start before 7am) | £[10] |
| Lunch (if away from normal workplace) | £[15] |
| Evening meal (if away overnight or late finish after 8pm) | £[25] |
- Receipts required
- Alcohol is not reimbursable (except client entertainment)
- These are maximum amounts, not entitlements
6.2 Working Lunches
Meals provided at meetings are not subject to individual limits but should be reasonable.
7. Entertainment
7.1 Client Entertainment
Client entertainment requires:
- Prior manager approval
- Clear business purpose
- Reasonable cost
7.2 Limits
| Type | Maximum per Head |
|---|---|
| Working lunch | £[25] |
| Client dinner | £[50] |
| Larger events | Prior approval required |
7.3 Records
All entertainment claims must include:
- Names of attendees
- Company/organisation represented
- Business purpose
- Receipt
8. Other Expenses
8.1 Telephone and Internet
- Business calls from personal phones: itemised and reimbursed
- Home internet for regular remote workers: [contribution/not covered]
8.2 Professional Subscriptions
Annual subscriptions to professional bodies may be reimbursed if:
- Relevant to your role
- Pre-approved by your manager
8.3 Equipment and Supplies
Work equipment and supplies should be ordered through normal procurement. Personal purchases require prior approval.
9. Non-Reimbursable Expenses
The following are not normally reimbursable:
| Item | Reason |
|---|---|
| Commuting to normal workplace | Personal expense |
| Personal items | Not business-related |
| Traffic fines and parking tickets | Personal responsibility |
| Alcohol (except approved entertainment) | Personal expense |
| Personal phone contracts | Even if used for work |
| Personal insurance | Personal expense |
| First class travel (unless approved) | Above policy |
10. Expense Claims Process
10.1 How to Claim
- Complete an expense claim form or submit via [expense system]
- Attach original receipts for all items
- Submit to your manager for approval
- Approved claims are processed by [Payroll/Finance]
10.2 Submission Deadlines
- Claims must be submitted within [30] days of expense
- Late claims may not be reimbursed
- Claims must be submitted by [date] each month for that month's payroll
10.3 Receipts
- Original receipts required for all claims over £[5]
- Credit card slips alone are not sufficient
- If receipt lost, complete a lost receipt declaration
10.4 Approval
- All claims require manager approval
- Claims over £[500] require [senior manager/director] approval
- Managers cannot approve their own expenses
11. Company Credit Cards
If you have a Company credit card:
- Use only for authorised business expenses
- Submit receipts and reconciliation monthly
- Personal use is strictly prohibited
- Report lost cards immediately
12. Advances
Cash advances may be provided for significant planned expenses.
- Request via [Finance]
- Full reconciliation required within [14] days of return
- Unspent advances must be returned
13. Consequences of Breach
- Fraudulent claims are gross misconduct
- Inaccurate claims may result in disciplinary action
- Repeated policy breaches will be addressed
14. Review
This policy will be reviewed annually. Expense rates will be reviewed against HMRC approved rates.
Key Contacts
| Query | Contact |
|---|---|
| Policy queries | [Contact] |
| Expense claims | [Contact] |
| Advances | [Contact] |
Document Control
| Version | Date | Author | Changes |
|---|---|---|---|
| 1.0 | [Date] | [Name] | Initial version |
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Frequently Asked Questions
- Do employers have to reimburse expenses?
- Employers must reimburse expenses that are contractually agreed. Beyond that, it's at the employer's discretion, but refusing to reimburse legitimate business expenses may cause issues. A clear policy helps manage expectations.
- What expenses are typically reimbursable?
- Common reimbursable expenses include: business travel (public transport, mileage, taxis), accommodation for business trips, meals while travelling, client entertainment (with limits), and work-related equipment. Commuting costs are usually not covered.
- Do expense payments have tax implications?
- Reimbursed expenses for legitimate business purposes are generally tax-free for employees. However, some expenses (like entertaining staff) may have tax/NI implications. Round sum allowances are taxable. Check HMRC guidance.