Could lost receipts be costing UK employees millions each year?

Expend Team

06 January 2022

Losing work receipts is a pain.

Not only for employees who could potentially miss out on getting their money back, but for the business too.

In most cases companies will honour an expenditure and reimburse the employee, but no receipt does mean that the business won’t be able to claim the VAT from HMRC. 

When it comes to expenses, the reason receipts are needed is for employees to provide evidence of any outlays they incur as part of their job. This could take the form of travel expenses, entertaining customers, gifting or fuel costs, for example. 

In 2019, there were almost one million companies in the UK still managing expenses manually which, according to Financial Director, took an extra day to process. In an article the publication printed, it claimed that lost receipts were costing UK business almost £3,000 per year. It went on to multiply that £3,000 with the one million businesses still relying on a paper process and concluded that this amount jumped to an eye watering cost of £2.8 billion.

Although there is no rule on the amount employees can claim without receipts in the UK, they should be reasonable enough for a tax inspector to accept. That said, expenses incurred without an accompanying receipt need to be evidenced in another way, on a bank statement for instance, to prove the transaction was genuine.

Loss of tax relief 💸

It’s not just employees who could potentially lose out on lost receipts.

Failure to provide a receipt means the business is unable to claim any VAT back from HMRC because there is no proof of purchase.

Of course, while one receipt here and there may not make much difference in the grand scheme of things, if missing receipts were commonplace across the business, the potential to miss out on VAT reclamation is potentially substantial.

This is why expenses software management platforms are so useful. They enable employees to scan receipts as soon as they receive them into the system. In doing this the chances of the receipt going missing in the first place is reduced to almost nothing. 

Convenience on the move 🚶🏻‍♂️ 🚶🏾‍♀️

Having the convenience of being able to log expenses ‘on the go’ is great for employees and the business alike.

Specialist providers like Expend have developed mobile apps that can be uploaded on to employee’s phones, enabling them to submit receipts during the course of the working day. If they forget, the system will keep reminding them.

Once inputted into the system, the paper till receipt is no longer required and the business has the evidence it needs to make its VAT reclamation. 

Lowering costs 💰

The cost benefits of digital expenses management software are numerous.

Not only does it eradicate the issue of lost receipts, but it also makes the process of expenses management far more efficient and less time consuming.

As a consequence, accounts staff are freed up to concentrate their attention on more strategic tasks that will help grow the business, while staff are provided with a secure and effortless way of logging their expenses.

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Expend Team

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