Taxman enjoys far more generous expenses policy than ordinary taxpayers
17th April, 2008
Employees of HM Revenue & Customs enjoy a far more generous expenses policy than ordinary employees.
According to information obtained by our experts, HMRC has a blanket dispensation on all expenses, which means that unlike ordinary taxpayers, employees of HMRC do not have to provide receipts to prove expenses have actually been incurred.
One example of this is a £100 allowance for an overnight stay in a London hotel by a HMRC employee – no receipt necessary.
Says Clive Gawthorpe, Partner at our Manchester office: “Accountants who frequently face HMRC’s challenges over expenses of as little as £10 will find it a little ironic that HMRC itself runs such a liberal “no questions asked” system for its own employees.”
Other examples of expense claims that don’t have to be supported by receipts include: £20 for an evening meal while away overnight; £6.50 for a meal when out of the office for more than 5 hours; and £14 for two meals when out of the office for more than 10 hours. In addition, passengers in a vehicle can claim 5p per mile when travelling for work, while the vehicle’s driver can claim 5p for each passenger he carries, in addition to his normal mileage allowance.
Adds Gawthorpe: “Another questionable HMRC practice is urging its employees not to publicise rates and allowances in relation to expenses, even though this is not confidential information. There is no logical basis to this restriction, and it just illustrates the HMRC’s unbalanced approach to dealing with dispensations within its organisation and towards other employers.”
In particular, in the National Insurance Manual, paragraph NIM05680, employees are told that: “Although they are not confidential, you should not publicise rates and allowances used by the Civil Service in relation to expenses.”
Money for nothing?
According to our experts, one particular allowance reimburses HMRC employees for free overnight stays with friends or family regardless of whether any cost has actually been incurred! When away on an overnight business trip, HMRC employees have the choice of staying at friends or relatives’ homes instead of a hotel – and claim £25 for the convenience.
Says Clive Gawthorpe: “As the HMRC has such a relaxed policy about unreceipted expenses for their employees, we think it would be appropriate for them to take a more understanding approach when dealing with the issue with other employers.”
Earlier this year HMRC announced that they would be clamping down on the use of those limited dispensations that it had granted to some UK employers. This clampdown would include the retrospective revoking of the right to accept some expenses claims without invoices (http://www.hmrc.gov.uk/employers-bulletin/bulletin28/dispensation.htm) a move that could land employers and employees with a substantial tax bill.
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