Employee problems - do they need expenses repaying earlier

28 March


We place a lot of trust in our drivers

The same is true in reverse – they have faith that we, as employers, will help them wherever possible. Employee expense guidelines are a big part of that commitment.

In today’s world, it’s less permissible to make a member of your fleet wait weeks (or even months) for reimbursements of expenses they’ve accrued on the road. Digital solutions are making this process faster and easier; by ignoring them, you may be doing your staff an injustice.

Let’s take a look at the issue in more detail...

Faults in the old system

Until fairly recently, employees had a burden to bear with expenses. They knew that employers, at the earliest, were likely to reimburse them at the end of the month when their pay is due. 

Fleet managers would track and retain a spreadsheet of employee expenses, totting up listing it as ‘reimbursement’ on the payroll. That way, no one is taxed on the expense costs they’re getting back, which sit alongside their taxable wage.

However, it’s easy to see where grievances occur. The traditional reimbursement model may leave someone out of pocket for weeks at a time. If a driver pays for something in the first week of the month, they’ll be repaid three weeks later. In the interim, they keep paying for expenses, until it all lands back in their account on payday.

This also assumes that the fleet manager never forgets to add the reimbursement to PAYE when it’s owed…

Proving and managing expense claims

Further problems exist on an administrative level. Employee expense guidelines can be lax in terms of who deals with ascending levels of cost.

For instance, someone in your accounts team could be responsible for claims up to £500, a Finance Director would then be responsible for anything between £500-£2,000, and anything over that limit, in theory, could be routed to the MD. Plenty of businesses don’t have a system in place that scales up with the value of the expenses for each worker.

A final issue lies in the act of collecting, analysing and storing receipts for HMRC. Paper records can go missing, invalidating the tax break on your expenses. Asking your drivers to  keep every fuel or hotel receipt safe can be a lot.

A better route forward for employee expense guidelines 

With these headaches to consider – stemming from timespans, a lack of administrative hierarchy and evidence collection – it’s worth finding a more streamlined method of paying for expenses.

A fuel card scheme, for instance, can transform your processes. Allstar have four different expense cards to explore. Give one to each driver – they can use a pre-set cash limit, filtered through a dedicated expense account, to cover any costs they take up. We have discount partnerships with thousands of fuel sites, supermarkets and repair centres. You then receive a HMRC-friendly invoice, so you can get the tax relief you’re entitled to.

With our help, reimbursement will become a past concern. Contact us to learn more or to enquire about other aspects of fleet management.

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