HMRC 'spare no expense' policy on staff allowances

HM Revenue & Customs staff enjoy a far more generous expenses policy than ordinary employees, UHY Hacker Young, the Birmingham accountancy group, has claimed.

It maintains that HMRC has a "questionable" dispensations policy on expenses, which frequently has the effect that, unlike ordinary taxpayers, employees do not have to provide receipts to prove expenses have actually been incurred.

One example, cited by the firm, is of a £100 allowance for an overnight stay in a London hotel.

Malcolm Winston, partner at UHY Hacker Young, said: "Accountants who frequently face HMRC's challenges over expenses of as little as £10 will find it a little ironic that HMRC itself runs such a liberal 'no questions asked' system for its own employees."

Other examples of expense claims that don't have to be supported by receipts include: £20 for an evening meal while away overnight; £6.50 for a meal when out of the office for more than five hours; and £14 for two meals when out of the office for more than 10 hours. In addition, passengers in a vehicle can charge 5p per mile when travelling for work purposes, while the vehicle's driver can claim 5p for each passenger he carries, in addition to his normal mileage allowance.

Mr Winston said: "Another questionable HMRC practice is urging its employees not to publicise rates and allowances in relation to expenses, even though this is not confidential information. There is no logical basis to this restriction, and it just illustrates the HMRC's unbalanced approach to dealing with dispensations within its organisation and towards other employers."

According to UHY Hacker Young, one particular allowance reimburses HMRC employees for free overnight stays with friends or family regardless of whether any cost has actually been incurred. When away on an overnight business trip, HMRC employees have the choice of staying at friends or relatives' homes instead of a hotel - and claim £25 for the convenience.

Mr Winston said: "As the HMRC has such a relaxed policy about their employees' expenses, we think it would be appropriate for them to take a more understanding approach when dealing with the issue with other employers."

Earlier this year HMRC announced that it would be clamping down on the use of those limited dispensations that it had granted to some UK employers. This clampdown would include the retrospective revoking of the right to accept some expenses claims without invoices, a move that could land employers and employees with a substantial tax bill.