Expense management in lockdown: How to ensure costs don’t spiral<\/p>\n<\/p>\n
It goes without saying that the current nationwide COVID-19 lockdown measures are having a major impact\u00a0on UK business. For many, they have\u00a0meant adopting new ways of working with whole teams working\u00a0from home.<\/p>\n
From a business finances\u00a0perspective, this can throw up a host of challenges.<\/p>\n
So, how can\u00a0business finance teams strike a balance between supporting staff while ensuring costs don’t spiral during a time when many businesses are so cash-strapped?<\/p>\n
This may seem obvious, but ensuring you have in writing your company policy on what can and can\u2019t be claimed for will stop any confusion further on down the line. You may wish it to include details of additional stationery, equipment or electricals that can be purchased and claimed back with potential price limits on each item.<\/p>\n
Perhaps you\u2019re willing to foot the bill for a new home desk or office chair, for example. The key will be ensuring that all employees are clear if there is a price limit on what you\u2019re willing to cover.<\/p>\n
However, bear in mind that in accordance with government\u00a0guidance<\/a>, employees will be able to claim back on any expenses that at are deemed \u2018reasonable\u2019.<\/p>\n When it comes to deciding what expenses are classed as reasonable, it\u2019s not explicitly stated in the standard government expense guidance.<\/p>\n Each claim will need to be taken\u00a0on a case-by-case basis.\u00a0For things like laptops, for example, if a standard model will do the job\u00a0over one with a higher spec, then that would most likely be deemed to be the reasonable choice.\u00a0<\/p>\n Of course, depending on their role, it may be that certain employees may require higher spec tech equipment, more licenses or new software for them to perform their role to the best of their ability. Here, it all boils down to striking the balance between what is reasonable and what is essential.<\/p>\n Next, it\u2019s worth taking a look at the latest specific\u00a0government guidance<\/a>\u00a0on working from home due to the pandemic. These measures will cover all employees that are now having to work from home due to the workplace being closed as well as those working from home due to having to self-isolate, but furloughed staff will not be eligible.<\/p>\n Under the official government advice, laptops, tablets, computers and office supplies can all be claimed for so long as they are used mainly for business purposes, with employees reimbursed in full and details reported on your\u00a0PAYE settlement agreements<\/a>.<\/p>\n However, where things start to get a little confusing is for things such as household utility bills and broadband. For broadband, the important distinction lies between whether the employee already had broadband or whether they will have to pay to get it set up.<\/p>\n If they have to pay for the broadband set-up, then they will be able to claim for the set-up fee but, as the broadband has been set-up for business use, it will mean any private use will have to follow strict limits.<\/p>\n For additional household utility bills, employees will be able to claim for up to \u00a36 a week.<\/p>\n Further challenges will come in the form of differentiating between business and private use. For services such\u00a0as the internet, landlines and even laptops, if an employee is claiming expenses back for them then it\u2019ll be important to show that there has been no significant private use. Naturally, this will be tricky to monitor as clearly you won\u2019t be with the employee in their home.<\/p>\n So, though it will mean there will have to be a level of trust between you and your employee, it\u2019ll also be essential for you to include in your expenses policy clear details about when and how private use is permitted, along with disciplinary consequences of non-compliance with the policy.\u00a0<\/p>\n Now more than ever, increasing numbers of businesses are turning to the latest tech applications to take on some of the burden of many day-to-day business tasks. With business finance teams now so stretched and often having to spend time crunching the numbers to keep their businesses afloat at a time when so much is uncertain,\u00a0financial management software\u00a0is often a welcome lifeline.<\/p>\n Allowing finance teams to achieve greater visibility across all financial aspects of the business while driving efficiencies helps teams better assess where cost savings can be made, leaving them better equipped to tackle the impact of COVID-19.\u00a0<\/p>\n In addition, with such tools able to pull through the latest scale rates automatically every three months from HMRC, keeping track of the latest rates is one less thing finance teams have to worry about.<\/p>\n It could be easy to\u00a0assume\u00a0that with more staff working from home, it’ll cut down on claims for\u00a0expenses\u00a0due to less travel and client\u00a0entertainment costs. However, in reality, if left unchecked, those expenses could soon\u00a0add\u00a0up.<\/p>\n Given that\u00a0employee expense claims cost the\u00a0UK \u00a31.9bn<\/a>\u00a0each year under normal circumstances,\u00a0and with the current lockdown measures\u00a0in place for the foreseeable, the time has never been more pertinent for finance teams to keep a closer\u00a0eye\u00a0on expenses, whilst still ensuring teams are supported.\u00a0<\/p>\n<\/p><\/div>\n \u00a0<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"HMRC’s guidance on expenses while working from home<\/h3>\n
Claiming utilities and broadband<\/h3>\n
Business use vs private use<\/h3>\n
Harness the power of tech<\/h3>\n