A quarter of expense claims are false, warns solicitors

Employers are being urged to manage expenses systems more efficiently after it was revealed that staff are claiming £1bn in phoney or incorrect expenses each year.

Law firm Mace & Jones issued its plea after research by Globalexpense found that almost a quarter of the total paid out by companies last year is false.

Fraudulent expense claims account for around £350m while another £670m should never have been paid because the items were not covered by company policy, according to a survey based on more than 4.8m expense sheets from over 100,000 employees in 140 companies. The total outlay was an estimated £5.8bn last year.

Examples listed in the survey include the purchase of 20 bibles, and a visit to a strip club in the US. Claims for haircuts were common, and one employee submitted a betting slip as a receipt.

Mace & Jones head of employment law Martin Edwards said while a degree of discretion may sometimes need to exercised employers need to be alert to staff 'on the make':

"First and foremost staff need to be given a clear company policy on expenses. This should spell out what can and cannot be claimed in black and white. However, there also needs to be close monitoring to ensure people do not abuse the system.

“Employers should make regular routine checks and compare how much staff are claiming. This should help identify people who are using expenses irresponsibly or excessively. Moreover it is advisable to drill into certain expenses which may be regarded as 'perks' such as meals and travel. Are these dinners, lunches and visits generating business for the firm or are they just taking the business for a ride?

“For the good of the firm employers should have tight procedures to ensure expenses are properly controlled."