If you provide certain business expenses to employees (such as company cars or pay for travel and entertainment expenses), you might need to report this to UK's tax, payments, and customs authority, HM Revenue and Customs (HMRC), and pay tax on them.

Employee expenses that have an exemption, however, do not need to be reported to the HMRC. If you are paying HMRC’s benchmark scale rates for allowable expenses, you do not need to apply for an exemption. You only need to apply for an exemption if you want to pay bespoke scale rates to your employees.

However, a degree of oversight remains. Organizations must institute proper internal controls to ensure that benchmark or bespoke scale rates are made only for business-related expenses. A qualifying business journey is one done by an employee to perform his or her duties but does not include home to work travel. Also, your employees aren’t allowed to check their own expenses, so someone else within your company needs to do this to make sure they’re legitimate.

We’ll be discussing HMRC’s stance on relevant business expense rules, such as record keeping, mileages, per diems (also known as “scale rate payments” in the UK), and more.




Compliance in United Kingdom

Compliance Center - Mileage rates

Mileage

Compliance center per diems icon

Per Diems

Compliance Center - Paperless

Paperless

Compliance center - Other topics

Other Topics

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