12 January 2007 | Paul Snell
Companies have been urged to keep a closer eye on employee expenses, after a survey revealed that nearly five per cent of all claims were false.
False claims cost UK businesses more than £151.5 million annually, according to the study by Software Europe. The total spend on employee business expenses is around £3.1 billion a year.
The main reason for fraudulent claims is a lack of verification by managers. Incorrect claims unnoticed by managers include one for 1,800 miles, when it should have been for 180 miles, duplicate claims made by the same person and another where one person claimed for 100 miles more than three other staff who had visited the same location. One company had to pay £150,000 extra in tax because their expenses were so poorly justified.
Adele Briggs, operations manager at Software Europe, said expenses often formed a large part of company spend but most firms failed to control the claims properly. She warned that if companies didn't ensure that expenses were justified, they could be at risk from unexpected tax demands.