“The best product available for managing expenses!”Irene
“Using Soldo has totally transformed our expense process. My employees are delighted by the ease of use – as am I!”Julian
Frequently asked questions
Why do I need receipts for expenses?
Business expenses can be deducted from your business taxes, but only if you’re able to prove they’re HMRC-approved running costs.
It’s unlikely you’ll need to send your expense receipts to HMRC, but you’re expected to be able to produce them if requested. In fact, it’s sensible to keep the last three years’ worth of receipts for reference.
Note that a bank or credit card statement isn’t sufficient as proof of expense. All this proves is that a payment was made, but it’s missing many of the key details you need, including what the payment was for and where it was made.
What does “tax-deductible” mean?
A tax deduction is a form of incentive offered by the government. It serves to lower your taxable income, which in turn lowers the amount of tax your business owes. If, for example, your turnover is £40,000, and you claim £10,000 in allowable expenses, you’ll only pay tax on the remaining £30,000.
What counts as a tax-deductible expense?
There are lots of rules around which employee expenses are exempt from tax and which aren’t, and you can find them all on the HMRC website.
But in short, tax-deductible expenses are those that represent your business’s everyday running costs, and they include:
- Office costs, including stationery, printing costs and postage
- Travel costs, including fuel, taxis, airfares and train tickets
- Accommodation and meals
- Miscellaneous costs, including client entertainment, parking and transaction fees
What is an expense policy?
An employee expense policy covers what team members are and are not allowed to claim company money for.
Its purpose is to clarify how much they’re allowed to spend on things like food and travel. It also tells them what they aren’t eligible to use funds for, so there are no disputes further down the line. You can draw the line wherever you decide, whether it’s at travel insurance or five star hotels.
Using Soldo, you can make sure they adhere to these conditions. Simply give them each their own prepaid card, and add rules and limits to define where and how they can spend their money.
Why do I need an employee expense policy?
Employee expense policies are an important way to:
- Limit runaway spending: Your policy makes it clear what’s expected of your employees, and what they can use company cash for.
- Create a culture of fairness: Your team is bound to incur costs as they do their jobs, and acknowledging that goes a long way.
- Avoid exaggerated claims: Your policy is a concrete document you can point to when employees overstep the mark.
You can learn more about how to create your own with our dedicated expense policy guide.
There are lots of rules about how HMRC treats expenses. Find out more here.
Take a deep-dive into why receipts are so important to your expense claims.