Searching for information on allowable expenses for employees for your business through HMRC? We have just the thing.
Read on for AXA’s handy guide to everything you need to know on staff expenses and more. Stay informed, compliant and on top of your finances. If you look after the pennies, the pounds will look after themselves and #FutureYouwillthankyou.
What are employee allowable expenses?
Employee allowable expenses allow you to claim back money spent on staff costs that relate to the running of your business. To ensure you’re educated on what you can and can’t claim, we’ve outlined some handy information below:
Staff salaries
Believe it or not, you may be able to claim back your staff salaries through employee allowable expenses. Salaries constitute a large portion of operating costs for businesses and can include the below in addition:• Wages
• Salary
• Bonuses
• Benefits
• Overtime
• Pensions
• Agency fees
• And more
To be eligible for this, it must meet the criteria of being wholly and exclusively for the purposes of the company and/or trade.
Travel Expenses
If you have one or more employees who regularly travel for business purposes, you may be able to claim back the costs in the context of business-related travel. Eligible expenses may include:
• Public transport fares
• Fuel/electric car charging
• Accommodation
• Meals incurred during travel
Again, to be eligible for this, it must meet the criteria of being wholly and exclusively for the purposes of the company and/or trade. Find out more about travel expenses and your business here.
Training and Development
Investing in employee training and development should be a focus in any company and often, these learnings can come at a hefty price. The good news is you can claim these costs back if they’re exclusively for the benefit of the company. Employee allowable expenses related to training and development may include the below:
• Cost of certificates
• Training materials
• Course fees
• Exam fees
• Venue/room hire
Home Office Expenses
Since the pandemic, the trend of remote working has become popular and with more workers enjoying a hybrid, or fully remote role, home office expenses become a focus for many. Below are some of the things that may be claimed:
• Internet costs
• Office supplies
• Technology
• Cost of utilities such as electricity or heating
Entertainment and Hospitality
From time to time, you may need to meet a client in person to discuss business or catch up with an employee over a cup of coffee. These hospitality expenses can often be claimed back, I it’s not deemed excessive or lavish in comparison to the business need. Some claim types may include:
• Client meetings
• Business meals
• Corporate events
• Interviews
• Networking events
Please note, these entertainment expenses must be explicitly for the needs of the business and cannot be claimed if the criteria is not met.
Which staff allowable expenses can’t I claim?
• Commuting costs
• Laundry costs
• Fines or penalties to the individual
• Entertainment expenses not related to the business
How do I claim employee allowable expenses?
To claim employee allowable expenses, you’ll have to make sure that all the types of expenses regarding staff are accounted for and properly documented. Remember to keep all receipts and accurate records – without these you may not be able to claim some expenses or have trouble in proving the purchases.
If you’re unsure on which expenses may be eligible, we’d advise you contact a qualified tax accountant or other professional to ensure compliance with HRMC guidelines.
Need more information on other types of allowable expenses related to running a business? Check out our guides on office allowable expenses and travel expenses. Check out our full guide on allowable expenses and stay on top of your taxes.
For further reading, please refer to the HMRC website and their section on allowable expenses for employees – and don’t forget to keep those receipts!
All links are checked and valid at time of publishing, 17 December 2024.
