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'Outdated' expense policies cost Brits a tenth of their salaries

Staff pay an average of £130 per night for business trips. Photo: The Access Group

Employees who regularly spend nights in hotels are forking out up to 10% of their salary to cover the cost of their company’s outdated expenses polices, according to new research.

The Access Expense Report, based on analysis of tens of thousands of hotel claims, shows staff pay an average of £130 per night for business trips — well above the limit of £90, or £120 in London — many firms impose, leaving them £40 per night out of pocket.

If the average work-away employee spends two nights away from home each week, over a year that £40 adds up to £4,160 or 9% of the average salary of a junior executive.

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“It’s obvious firm’s expense policies are failing to reflect the true cost of hotel stays. People are either plugging the shortfall themselves, or else businesses are spending more than they have budgeted for,” Dan Mizon, expense management expert at The Access Group, said.

“Capping hotel bills seems like an easy way for companies to save money, but it can be a short-sighted move. When staff are prepared to work away from home, it hardly seems fair to expect them to spend their own money on accommodation.”

“Companies that simply approve these claims also risk putting themselves at a financial disadvantage, since costs can soon escalate,” Mizon said.

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“This is why, alongside a realistic expenses policy, they need to drill down into their expenses data to pinpoint savings opportunities, for example, negotiating a discounted rate with a specific hotel.”

The report shows businesses are also losing out because almost half of expenses (48%) are submitted without a VAT receipt.

This is “potentially disastrous” news for companies because it means they’re unable to claim back 20% on purchases and also risk submitting inaccurate information to HMRC.

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A “missing bit of paper” could well be costing UK businesses billions each year, the report states, with smaller firms being hit hardest.

The Access Group recommended changes such as making it easy to submit receipts via a mobile app to make it easier for employees, as well as advising business to “explain how the company could use additional funds to improve [employees’] working lives”.