Professionals who overclaim on their business expenses could be costing the UK economy a massive £1.6 billion a year, according to a new report from Allstar Business Solutions.
The study, which questioned 1,000 working professionals, reveals that 36 per cent of drivers have overclaimed mileage and 17 per cent of employees deliberately overclaim on all of their business expenses each month, whilst a further 41 per cent feel there wasn’t anything wrong with doing so, despite it being illegal.
With more than half of respondents (55 per cent) admitting to adding up to ten per cent on to their expenses every month, and a quarter of people claiming up to 20 per cent extra, this is estimated to be costing the UK economy a massive £1.6 billion each year..
When asked why they choose to overclaim, 40 per cent of respondents don’t feel they get paid enough; 36 per cent they do so to make up for money owed from lost receipts. Shockingly, almost a third (29 per cent) simply follow their colleagues lead, highlighting a worrying trend in UK culture, stating that it’s something that ‘everyone does’; while 28 per cent simply feel they can ‘get away with it.’
Paul Baker, vice president customer management at Allstar Business Solutions, says, ‘It is of no doubt that our research has revealed some shocking findings and it appears overclaiming is a very big problem for British businesses. Not only is it costing individual companies, it is also having a much bigger impact on our wider economy as a whole and people don’t seem to care that it is both dishonest and illegal. To help businesses we have created a dedicated white paper looking at pay and reclaim in much more detail, specifically in relation to fuel which is commonly one of the biggest expenses for a company. We hope that this will encourage business owners to review processes they have in place in order to minimise these losses.’
It seems men are less bothered in general about expenses as the study finds that males are more likely to overclaim on expenses (20 per cent) than women (15 per cent), and more female professionals felt that it is wrong to claim more than they’re owed (63 per cent). Those in Northern Ireland (24 per cent), the Midlands (23 per cent) and the North West (30 per cent) are most likely to overclaim.
With almost three quarters (73 per cent) of employees spending up to £100 on business expenses every month, the most unusual items professionals admitted to reclaiming were:
2. Alcohol for personal use
4. Home improvements
5. Personal groceries
6. Personal parking fines
7. Meals which weren’t business related
8. Hotel breaks with the family
And it starts young, with a third of 18-34 year olds saying they’ve overclaimed in the last 12 months but only 15 per cent of over 55s admitting to have done so recently.
The business sectors most likely to overclaim on expenses include:
1. Creative arts 50 per cent
2. Energy and utilities 45.5 per cent
3. Information, research and analysis 40 per cent
4. Environment and agriculture 35.7 per cent
5. Business, consulting and management 28.6 per cent
Paul Baker adds, ‘We also found that 80 per cent spend between 1–2 hours a month working on their expenses claims each month. Those hours spent processing could be better spent working on more productive tasks.’