Employees can claim expenses for purchases they have made that support them in doing their job. Every company will have its own specific policies in relation to expense claims and what can be claimed for. According to the policy, companies will typically reimburse all reasonable business expenses incurred in the work done by an employee for its employer.
Businesses can only reimburse expenses that are incurred completely for the purpose of business. So, if an expense has an element of personal use, only the business part can be claimed. An example would be vehicle fuel. When an employee fills their car up and makes a business journey, they can’t claim the cost of the whole tank of petrol, only the amount they used for the business trip. In this case, companies tend to pay a per mile allowance that reflects the cost of the fuel plus an amount towards wear and tear on the vehicle. The employee must record the distance travelled and claim for the number of miles, at the mileage rate specified. Mileage rates may be adjusted for different vehicle engine sizes or types.
If an employee buys something and it’s not for business purposes, then reclaims the cost from an employer, it becomes a benefit. This is taxable for the employee, because it’s regarded as a form of remuneration.
Here are some examples of other types of expenses that employees can claim for:
In all the above examples though, you should check your own organisation’s travel and expenses policy to make sure you only purchase items that the company will reimburse.
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