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Naturally, most companies love to reduce their tax bill, and this is a completely legitimate and commonplace practice.Ī company could of course reimburse employees for any payment they make. But why exactly?Ĭompanies can claim tax deductions on expenses, but only if they have a valid proof of purchase and can prove it was a business expense. You know that you need a valid proof of purchase. If you’re looking for more information on expense policies generally, check out our handy guide. In general terms, a document will be sufficient if it shows the amount of an expense, as well as the date, place and nature of the expense.įor example, a standard receipt will be valid as a proof of purchase, providing it clearly shows these details and lists the amount as being paid: With all these complexities, it’s no wonder there are so many hidden costs when it comes to expense claims. It isn’t always so easy to navigate the ins and outs of expense reports. Simple, right?īut how should a company process a reimbursement, exactly? And what proofs of payment do companies need to retain for tax purposes? Most people understand the fundamental concept of employee expense claims.Īn employee takes care of a professional expense within the scope of his or her professional activities, and the employer reimburses them. We highly recommend you consult your accountant or lawyer if you aren’t sure how you might be legally affected. With our help, you can make it quick and easy to process expense claims and repay your staff, all while complying with your tax requirements.ĭisclaimer: These are just guidelines. and U.S., so you can be sure you're staying above board. We'll also look at the key rules in the U.K. In this post, we’ll take a look at the key steps to collecting correct and valid proofs of payment.

Unfortunately, the expense claim process isn’t just a pain for employees.Įmployers must also consider the proofs of payment they need to retain, including how and where to store these, and how to make them available when filing taxes. Paying for expenses, filling out forms, holding on to the right receipts: it’s no wonder expense claims are one of the most hated parts of working life. Understanding the rules around expense claims can be complex and time-consuming.