As an employer providing business or private expenses for your employees, you have certain tax, National Insurance and reporting obligations.
The rules on cash sum payments for business expenses cover:
- cash sums you provide to meet the costs of your employees’ expenses
- expenses they’ve paid for themselves that you reimburse
- ‘scale rate payments’ you pay at a level agreed with HM Revenue and Customs (HMRC)
- ‘round sum allowances’, which you give to an employee regardless of how they spend them
Payments for private expenses count as earnings.