A practical guide for employers and employees on what can usually be claimed, what should be avoided, and how staff expenses should be approved and evidenced.
Note: This guide is intended as general guidance for UK businesses. Tax treatment can vary depending on the facts, so employers should check with their accountant or tax adviser where needed.
Core principle #
Staff expenses should only be reimbursed where the cost is:
- reasonable
- business-related
- properly evidenced
- approved in line with the company’s expenses process
A useful rule of thumb is:
An expense should be incurred wholly for business purposes, not mainly for personal convenience, and should be supported by a receipt or other clear evidence.
Employers should take particular care with travel, accommodation, meals, entertaining, homeworking and benefits, as these can have tax, National Insurance or reporting consequences.
What staff can usually claim #
| Category | Normally allowable | Not normally allowable |
|---|---|---|
| Business travel | Train, tube, bus, flights, justified taxis, parking, tolls and congestion charges for business journeys | Ordinary commuting between home and a permanent workplace |
| Mileage | Business journeys made in an employee’s own car, van, motorcycle or bicycle | Home-to-office commuting or private journeys |
| Accommodation | Reasonable hotel costs for overnight business trips | Luxury upgrades, minibar charges, films, leisure facilities or personal extras |
| Meals and subsistence | Reasonable meals while travelling for business or staying away overnight | Everyday meals at an employee’s normal workplace |
| Client entertaining | Approved client meals or hospitality with a clear business purpose | Excessive entertaining or poorly documented costs |
| Phones, software and internet | Approved work-related subscriptions, business calls and necessary digital tools | Personal contracts or subscriptions unless agreed in advance |
| Training and professional fees | Role-related training, professional memberships and required certifications | Personal development unrelated to the employee’s role |
| Office supplies and equipment | Approved stationery, postage, work equipment and essential supplies | Unapproved upgrades or items mainly for personal use |
| Working from home | Employer-approved business costs, depending on the working arrangement | General household costs unless specifically covered by company policy |
Business travel #
Employees can usually claim reasonable travel costs where the journey is made for business purposes.
Allowable travel costs may include:
- train, underground, bus and tram fares
- flights for business trips
- taxis where public transport is impractical, unsafe or time-critical
- parking for business journeys
- tolls and congestion charges
- business-related travel insurance
- necessary business calls while travelling
Travel that is not usually allowable #
The following are not normally reimbursed:
- ordinary commuting between home and a permanent workplace
- private journeys
- travel for personal convenience
- upgrades that have not been approved
- costs for partners, spouses, family members or friends
Mileage #
Where employees use their own vehicle for business journeys, the company may reimburse mileage using HMRC-approved rates.
| Vehicle | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Cars and vans | 55p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
Employees should record:
- date of travel
- start point
- destination
- business reason for the journey
- number of business miles claimed
Important: Mileage cannot normally be claimed for ordinary commuting between home and a permanent workplace.
Accommodation #
Employees may claim reasonable accommodation costs where an overnight stay is necessary for business.
Normally allowable costs include:
- hotel room charges
- reasonable breakfast or evening meal costs when staying away
- business Wi-Fi where needed
- parking at or near the accommodation, if required for the business trip
Not normally allowable:
- room upgrades
- minibar charges
- films or entertainment
- spa, gym or leisure costs
- additional nights for personal convenience
- accommodation for family members or guests
Meals and subsistence #
Employees may claim reasonable meal costs when travelling for business, attending off-site meetings or staying away overnight for work.
A simple internal guide could be:
| Travel duration | Suggested meal allowance |
|---|---|
| 5 hours or more | Up to £5 |
| 10 hours or more | Up to £10 |
| 15 hours or more and still travelling after 8pm | Up to £25 |
These figures can be used as a practical benchmark, but the expense must still be genuinely business-related.
Important: Company spending limits are internal controls. They are not automatically tax-free limits.
Meals that are not usually allowable #
Employees should not normally claim for:
- everyday lunches at their normal workplace
- meals that are mainly personal
- alcohol, unless specifically approved as client entertaining
- excessive restaurant costs
- meals without receipts, unless a scale-rate arrangement has been approved
Client entertaining #
Client entertaining may be reimbursed where there is a clear business purpose and the cost has been approved.
Examples may include:
- taking a client for lunch after a business meeting
- modest hospitality linked to a sales meeting
- refreshments for external business visitors
- approved networking events
Claims for entertaining should include:
- names of attendees
- organisations represented
- business purpose
- date and location
- itemised receipt
Note: Client entertaining may be reimbursed by the company, but the tax treatment can differ from ordinary staff expenses.
Training and professional fees #
The company may reimburse training or professional costs where they are relevant to the employee’s role.
Normally allowable:
- role-specific training courses
- required professional memberships
- industry certifications
- conferences or seminars linked to the employee’s work
- books or materials required for approved training
Not normally allowable:
- training unrelated to the employee’s role
- purely personal development
- courses booked without approval
- memberships that are mainly personal or social
Phones, software and digital tools #
Employees may claim approved technology costs where they are needed for work.
Examples include:
- business software subscriptions
- work-related mobile phone charges
- business calls
- approved cloud storage or productivity tools
- specialist apps needed for the role
Personal contracts, personal subscriptions and non-essential upgrades should not be reimbursed unless agreed in advance.
Office supplies and equipment #
The company may reimburse reasonable costs for approved work equipment and supplies.
Examples include:
- stationery
- postage
- printer ink
- small office supplies
- approved computer accessories
- specialist equipment needed for the role
Larger equipment purchases should normally be approved before purchase.
Working from home expenses #
Working from home costs should be handled carefully and consistently.
The company may reimburse approved business costs, depending on the employee’s working arrangement and the company policy.
Potentially allowable costs may include:
- work-related phone calls
- approved office equipment
- necessary software
- additional costs agreed in advance
Not normally allowable:
- general household bills unless covered by policy
- rent or mortgage costs
- home improvements
- furniture bought without approval
- broadband packages used mainly for personal purposes
Costs that are usually not reimbursed #
The company will not normally reimburse costs that are personal, excessive, unapproved or unrelated to business duties.
Examples include:
- ordinary commuting
- parking fines, speeding fines or penalties
- personal clothing, unless specialist or protective clothing is required
- personal entertainment
- childcare or pet care
- partner, spouse or family travel
- alcohol, unless approved as client entertaining
- costs without receipts, unless pre-approved
- loyalty points or rewards bought personally
- personal subscriptions
- unapproved upgrades
- gifts or hospitality that breach company policy
How to make an expense claim #
All claims should be submitted promptly and include enough detail for the company to confirm the cost was business-related.
Each claim should include:
- date of the expense
- supplier name
- amount paid
- VAT receipt or invoice where available
- business purpose
- client, project or department
- names of attendees for meals or entertaining
- journey start and end points for mileage
- manager approval
Claims should normally be submitted within 30 to 60 days of the expense being incurred. Late claims may require additional approval.
Receipts and evidence #
Employees should provide receipts for all claims wherever possible.
Acceptable evidence may include:
- itemised receipts
- VAT invoices
- booking confirmations
- travel tickets
- mileage logs
- hotel invoices
- approved email confirmations
Card statements alone are usually not enough because they do not show what was purchased.
Suggested spending limits #
The company may set internal spending limits to encourage consistency and prevent excessive claims.
| Expense type | Suggested internal limit |
|---|---|
| Breakfast while travelling | £5–£10 |
| Lunch while travelling | £10–£15 |
| Dinner while travelling | £25–£35 |
| UK hotel outside London | £120–£180 |
| London hotel | £180–£250 |
| Taxi | Allowed only where justified |
These limits should be treated as company controls, not automatic tax-free allowances.
Approval process #
A simple approval process could work as follows:
- Employee checks whether the expense is allowed.
- Employee gets pre-approval for unusual, high-value or overnight costs.
- Employee pays for the expense and keeps the receipt.
- Employee submits the claim with the required details.
- Manager reviews the business purpose and reasonableness.
- Finance checks the evidence and processes reimbursement.
Expenses may be rejected if they are late, unsupported, excessive, personal or outside policy.
Example policy wording #
Employees may claim reimbursement for reasonable, necessary and properly evidenced expenses incurred wholly for business purposes. Claims must be submitted with receipts, a clear business reason and manager approval. The company will not reimburse ordinary commuting, personal costs, fines, excessive expenditure or unapproved items. Mileage will be reimbursed at HMRC-approved rates unless otherwise stated. Travel, accommodation and subsistence must be reasonable, pre-approved where practical, and in line with this policy.
Quick checklist for employees #
Before submitting a claim, ask:
- Was this expense necessary for work?
- Would I have incurred this cost if I was not working?
- Is the amount reasonable?
- Do I have a receipt or clear evidence?
- Have I included the business purpose?
- Was approval needed before spending?
- Is the claim being submitted on time?
If the answer to any of these is unclear, check with your manager or finance team before submitting the claim.
Disclaimer #
This guide is for general information only and should not be treated as tax, legal or accounting advice. UK tax rules can change, and the correct treatment depends on the facts of each case. Employers should take professional advice before finalising their expenses policy.