Employee Expense Fraud UK

How to Cut Down Employee Expense Fraud and Maximise VAT.

In every organisation, claimants sometimes make errors in their claims, whether intentional fraud or accidental error.

Employee Expense Fraud in UK

In the UK, 10% of employees admit to making inaccurate expense claims “all the time”.

Whilst a further, 20% make incorrect claims “irregularly”.

As reported by the Global Payroll Association, the most common offenses are overinflated mileage claims (27%). The rounding up of mileage claims is the top category in expense fraud, with 37% of employees admitting that they have submitted slightly overinflated travel claims.

The next popular offenders are; buying office stationary solely for personal use (20%) and, doctoring taxi receipts to reclaim a higher fare (16%). These 3 culprits total 63% of all expense fraud.

Some claimants even swap hotel rooms during overnight stays, to reclaim the initial, more expensive room.

Since the pandemic fraud has increased in England and Wales by 19.8%.

UK Company Fraud Losses

Fraudulent claims often start small; then, over time, they snowball until they’re hitting your organisation hard.

In 2021, the estimated cost of Fraud to UK companies was £190 billion.

The private sector suffer most with capital losses of around £140 billion, the public sector are next with losses of an estimated £40.4 billion.

The reasons that Expense Fraud is committed so frequently in the UK are:

  • Change in Circumstances – An employee may experience personal or financial problems, domestic issues, or debt. During times of economic uncertainty such as many are experiencing in 2022, this could play a key role in the rise of expense fraud.
  • The “Everybody does it!” attitude – unfortunately, this can be ingrained into company culture, which incorrectly leads employees to believe that expense fraud is acceptable.
  • The ‘Entitled’ attitude – when an employee travels to work or a work trip takes longer than expected for any reason, they can sometimes feel entitled to extra recompense.
  • Opportunity – when it’s easy for employees to commit fraudulent expense claims, some claimants will oblige.

A robust Expense Management System with thorough processes can help counteract some of the above.

For example, we estimate that the MyExpenses in-built GPS Mileage Tracker saves an average of 10% on all mileage claims.

Accidental Expense Claim Errors

Whether a zero is missed off the end of a number, or the same number has been entered twice; after a long day at work, simple human errors will happen.

Accidental expense claim errors also include receipts provided not matching the claim, or incorrect VAT reclaim.

VAT reclaim is another key area where many organisations lose out.

The only way to prevent the capital losses that arise from both intentional and unintentional discrepancies – requires an abundance of vigilance, time and resources from your finance and admin teams.

Manually checking the accuracy of EVERY claim is the definition of a resource drain. 

Accurate Receipt Validation Checking Process

Our MyExpenses’ Receipt Validation team of experts are here to help.

Now you can have receipt checking accuracy without placing a strain on your employees.

The receipt validation team pride themselves on reducing expense claim errors and and maximising your VAT reclaims.

You can find out more about the service and the team’s incredible results by visiting our dedicated Receipt Validation page here.