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THE HOTTEST TOPIC IN THE UK TODAY!

The subject of expense claims is the hottest topic in UK news at the moment. Moat clearing, ginger biscuits and pay-per-view movies are just some of the claims that have been listed on expense claims by MPs in the last few years, but what is the real cost to British businesses?

As the recession takes hold, salaries can either be frozen, or for the lucky few who do have their pay increased, it’s often below the rate of inflation, and this becomes a fertile breeding ground for employees to find bumping up their expense claims tempting, or in some cases, justifiable.

In recent research (based on a representative sample of almost 2,000 adults) conducted by GlobalExpense, an expense management provider, it has been estimated that the average amount added to recent claims has been just under £14. While this doesn’t seem much money, if the estimated 3.7m people in the UK who claim expenses added £14 to a claim just once a year, the additional cost to British businesses is a staggering £52m.

In these times when every single penny counts and companies are battling with banks regarding loans and overdrafts, these claims can do much more damage than you might think, and somewhat worryingly, 95% of employees say that their employer has never queried or rejected a claim for being too high. Now may be the time to start!

The research findings are as follows –

• 30% of adults see exaggerating expenses as acceptable, especially if
  • a) Mileage rates don’t actually cover car and fuel costs (76%)
  • b) Pay hasn’t risen in line with inflation (40%)
  • c) The employer is slow at paying expenses back (29%)
  • d) The employee feels he or she is underpaid (28%)
• 13% of expense claiming employees say it’s likely or very likely they will exaggerate their expense claims if they find themselves in economic difficulty due to the recession and think they can get away with it.
• 38% of those who exaggerate each claim add £5 or less, while 2% added over £100.
• 60% of those researched said that business mileage was the most likely expense to be exaggerated.
• Subsistence costs, such as food while away on business accounts for 32% of exaggerated claims.
• 42% of 18-34 year-olds agree that exaggerating claims is an acceptable practice.

In 2007, UK businesses paid out approximately £5.8bn in employee expenses, with as much as £1.02bn being either false, or out-of-policy expense claims. Corporate expense policies are being systematically and routinely ignored, and with profits across all sectors and industries expected to be lower in 2009, making sure your expenses policy is strictly followed can have a serious impact on your bottom line.

For more information and advice on these issues and for your upcoming summer recruitment needs, please call the specialists at Forties People on 020 7329 4044, or visit us online at www.fortiespeople.com .