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Reimbursement of Expenses policy template

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What is a Reimbursement of Expenses policy?

A reimbursement of expenses policy is a set of guidelines and procedures that define how an employee can be reimbursed for any expenses incurred during the course of their work. Such expenses could include travel expenses, meals, lodging, equipment or materials, or other related costs. The policy outlines what expenses are eligible for reimbursement and how they will be reimbursed.

Having a clear reimbursement of expenses policy can help ensure that employees are properly reimbursed for expenses incurred while conducting company business. It can also help prevent misunderstandings or disputes between employees and employers regarding what expenses are eligible for reimbursement and how reimbursement will be handled.

Reimbursement of Expenses policy template
reimbursement of expenses policy template

What legal and best practice aspects should employers be aware of?

Here are some key UK employment law considerations to keep in mind when implementing expenses policies:

  • Compliance with tax law: The policy must comply with HMRC rules, which outline what expenses can be reimbursed tax-free, and which require tax to be deducted from certain payments.

  • Reasonable and necessary expenses: Employers are only required to reimburse expenses that are reasonable and necessary for the employee to do their job. This means that expenses must be directly related to work duties, and not personal expenses.

  • Discrimination: The policy must not discriminate against any employees on the basis of protected characteristics, such as age, race, gender, or disability.

  • Health and Safety: Employers must ensure that expenses policies do not require employees to carry out work activities that are unsafe or put their health at risk.

  • Data Protection: Employers must ensure that any personal data collected as part of expenses policies is handled in compliance with the General Data Protection Regulation (GDPR) and the Data Protection Act 2018.

  • Employee Communication: Employers must ensure that the expenses policy is clearly communicated to all employees, and that employees understand the policy requirements, including how to claim expenses and what receipts and documentation are required.

  • Grievances and complaints: Employers must have a system in place for employees to raise concerns or complaints about the expenses policy, and for these to be investigated and resolved fairly.

  • Contractual entitlements: Employers must ensure that the policy is consistent with the terms of the employment contract and any relevant collective agreements.

Reimbursement of Expenses Policy


Overview

Expenses incurred by employees will be reimbursed in accordance with these rules. These rules are designed to provide for the reimbursement of reasonable out-of-pocket expenses wholly, exclusively, necessarily and actually incurred by an employee engaged on the business of the Company.

Scope

This company travel policy is applicable to all employees of [company name].

General principles

In order to claim back expenses, you must complete and sign a claim form, have it countersigned by your line manager and then submit it to [insert name of contact]. You are expected to provide original VAT receipts for expenditure incurred where this is reasonably practicable and you should give a full description of the expenditure incurred and why it was necessary. You should ensure all expense claims are made and submitted promptly.

The Company does not advance expenses.

Travelling expenses

The Company will reimburse travelling expenses necessarily incurred for business purposes. This is generally limited to the cost of travel from the Company's office to the business destination and return. Journeys between an employee's home and normal place of work are considered private and do not constitute business travel. Under no circumstances should you claim the cost of your journeys from home to your normal place of work.

The following expenses will be paid:

  • where you use your own car, mileage allowance at a rate per mile as determined by the Company from time to time and notified to you. In this case, ensure you record your actual mileage undertaken. Your car must be comprehensively insured for use while on Company business
  • where you have a Company car, the cost of fuel you have used in connection with Company business
  • standard class rail or coach fares
  • taxi fares where suitable public transport is not available
  • economy class air fares (provided your line manager has authorised this in advance).

The Company is not responsible for any fines or penalty fares which you may receive while on Company business. The responsibility for paying such fines or penalties is yours.

Subsistence

If you are required to stay away from home overnight on Company business, you may claim the costs of overnight accommodation, i.e. evening dinner, bed and breakfast only, at an appropriate hotel or guesthouse approved in advance by your line manager. The Company will not reimburse items of a personal nature such as alcoholic drinks, newspapers and private telephone calls.

If you are required to leave the office on Company business for more than [insert number] hours but you are not staying away overnight, day subsistence will be payable at rates determined by the Company from time to time and notified to you.

Telephone calls

The cost of telephone calls made using your private telephone or mobile phone, in connection with Company business, will be reimbursed. Itemised telephone bills are required to support this expense claim.

Staff and client entertainment

Only line managers are permitted to claim back expenses incurred for staff entertaining.

Client entertaining means hospitality provided by the Company or its employees to non-Company employees in connection with the business of the Company. You must judge what is reasonable in the circumstances and it should normally be possible for your line manager to agree to a level of entertaining expenditure before the commitments are made.

Other expenses

You should seek the prior approval of your line manager before incurring other expenses.

This policy [does not] form[s] part of your terms and conditions of employment.

Version: [1.0]

Issue date: [date]

Author: [name, job title]

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