UK Expense Policy Template
A UK expense policy template is a ready-to-use document that defines what business expenses employees can claim, at what spending limits, and how the approval and reimbursement process works.
A free, ready-to-use expense policy for UK small businesses. Copy, customise the bracketed fields, and share with your team.
This template is for general guidance only. It does not constitute legal or tax advice. Always check current HMRC guidance and consult a qualified accountant for your specific situation.
How to use this template
- Replace all [bracketed fields] with your company's details and limits
- Review the allowable expense categories and remove any that don't apply
- Get sign-off from your Finance Manager or accountant
- Share with all employees and include in your onboarding documents
[Company Name] — Employee Expense Policy
1. Purpose
This policy sets out the rules for claiming business expenses at [Company Name]. It applies to all employees, contractors, and directors who incur costs on behalf of the business. The aim is to ensure that expenses are legitimate, properly approved, and recorded accurately for HMRC compliance.
2. Allowable expenses
The following categories are reimbursable when incurred wholly and exclusively for business purposes: • Travel — trains, taxis, fuel (HMRC advisory rates), parking, tolls • Accommodation — hotels for overnight business travel • Meals — when away from the office on business (up to £[X]/day) • Client entertainment — meals and events with customers or prospects (up to £[X]/person) • Office supplies — small purchases required for day-to-day work • Software and subscriptions — pre-approved tools only • Training and conferences — pre-approved by a line manager • Mobile phone — business calls only, or a proportion of monthly bill
3. Non-allowable expenses
The following will not be reimbursed: • Personal meals unless on overnight business travel • Alcohol above a reasonable amount at client entertainment • Traffic fines or parking penalties • Gifts above the HMRC trivial benefit limit (£50) • Commuting costs (home to usual place of work) • Personal subscriptions or memberships • First class travel unless pre-approved
4. Approval limits
Expenses must be approved by the relevant authority before or after the purchase (as appropriate): • Up to £[X] — direct line manager approval • £[X]–£[Y] — Finance Manager approval • Over £[Y] — Director approval Claims should be submitted within 30 days of the expense being incurred.
5. Receipt requirements
A valid receipt or VAT invoice must be submitted for all expenses over £[X]. Receipts must show: • Date of purchase • Supplier name and address • Amount paid • VAT amount (where applicable) HMRC requires businesses to retain expense records for a minimum of 6 years. Digital copies (photographs) are acceptable provided they are clear and legible.
6. Mileage claims
Employees using a personal vehicle for business travel may claim mileage at HMRC-approved rates: • Cars and vans: 45p/mile for the first 10,000 miles per tax year, then 25p/mile • Motorcycles: 24p/mile • Bicycles: 20p/mile Mileage claims must include the date, start and end location, purpose of journey, and total miles. Commuting from home to your regular workplace cannot be claimed.
7. International travel
International business travel must be pre-approved by a Director. When travelling abroad: • Economy class is standard for flights under 5 hours; business class requires Director approval • HMRC subsistence rates for overseas travel apply • Foreign currency receipts should be converted at the exchange rate on the date of purchase • Visa and travel insurance costs are reimbursable
8. Reimbursement process
Submit all expense claims through [your expense management system] with receipts attached. Claims are typically processed within [X] working days of approval. Reimbursements are paid directly to your nominated bank account. Expenses submitted without receipts or outside the 30-day window may be declined.
9. HMRC compliance
All expenses must be "wholly, exclusively and necessarily" incurred in the performance of your duties to be tax-free under HMRC rules. Where an expense has a personal element, only the business portion is reimbursable. The company will not reimburse expenses that create a taxable benefit-in-kind without prior arrangement with the Finance team.
10. Policy review
This policy is reviewed annually by the Finance Manager. Any questions should be directed to [finance@company.com]. Last updated: [Date] | Version: 1.0
Automate your expense process
Once your policy is in place, Claimio handles the rest — AI receipt scanning, admin approvals, accounting export (Xero, QuickBooks, Sage), and Stripe reimbursements.