Fraudulent expense claims costing £350m a year, service provider claims

Employees of UK businesses are claiming more than £1bn in fraudulent or incorrect expenses, a survey has revealed.

UK companies spend almost £6bn a year on employee expenses and the research, by expense management services provider Globalexpense, analysed almost five million expense forms from upwards of 100,000 employees at 140 companies.

It estimates that companies are losing around £350m a year to fraudulent expense claims and a further £670m is paid out for things not covered by company policy. Some of the more outlandish claims include the purchase of 20 bibles and a visit to a strip club in the US. Claims for haircuts were common and one employee even submitted a betting slip as a receipt.

The average employee expenses claim for the year was a little over £1500. Financial services employees are by far the biggest claimers, with an average of £128 per week being claimed, predominantly for hospitality and entertainment. Media and publishing workers are the second biggest, with an average weekly claim of just under £70.

Martin Edwards, head of employment law at Mace and Jones, a law firm based in the north west, said: "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.”