Brits admit to exaggerating expense claims

New research reveals the extent to which dishonest employees are costing businesses by putting their hand in the company coffers and exaggerating expense claims

• More than half (53%) of UK workers surveyed admit to exaggerating an expense claim by including personal items on it.
• Women put an average £2,000 worth of personal items through expenses last year, significantly more than men at £1,531.
• Workers in the West Midlands claim the most each year at £2,170 per person on average, while those in the South East claim the least at £316.

At a time when British businesses continue to face financial pressure, new research released by RSA, the UK’s largest commercial insurer, reveals that as many as 53%* of employees surveyed have raided the company coffers and exaggerated an expense claim.

Based on responses from 1,000 British workers with access to an expense account, the findings show that exaggerated expense claims equated to an average of £1,768 per person last year.

Proving that there is such a thing as a free ride and a free lunch, the most frequently exaggerated expense claims are for company car mileage, restaurant meals and food on the go – perhaps unsurprising as rising inflation continues to push the cost of petrol and food to record highs.

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It appears increasingly dishonest employee attitudes and a lack of effective processes for protecting businesses from fraudulent practices is only adding to the problem. When asked why they exaggerate expense claims, a third of respondents claim that everyone does it, 25 per cent say it’s easy to get away with, and almost 20 per cent believe the company owes it to them for their hard work. In addition, 40 per cent don’t believe an exaggerated expense claim amounts to theft, irrespective of its value.

Commenting on the findings, Jon Hancock, Managing Director, Commercial at RSA, said: “This research demonstrates the frightening ease with which employees are able to sneak personal items through the business expense claims process. They might believe that a small amount here and there won’t make a difference, but it adds up and over time can have a major impact on businesses and, by extension, on the wider economy.

“Employers must make sure they have robust processes in place to safeguard against fraudulent expense claims – the importance of which should not be underestimated.”

The findings also highlight stark differences between employees across the UK regions and those working in different sizes of companies. Workers surveyed in the South East are the most cautious, having exaggerated expense claims by a total of £316 per person on average over the last twelve months, while those in the West Midlands pocketed as much as £2,170 over the same period.

There is also real variation between the levels of fraudulent activity anticipated within each region year-on-year. While workers in the East Midlands and South East say they expect to double the value of personal items wrongfully claimed in the next twelve months, those in the North East expect this value to fall by more than half.

Looking at the breakdowns according to company size, more than half of employees of medium sized businesses who have exaggerated an expense claim do so at least once a year, while in micro businesses half of wrongdoers have only ever done so once in their life.

The average value of personal items claimed in the last twelve months by employees of medium sized businesses who have exaggerated an expense claim was also highest at £3,108, falling to £775 for those working in micro sized organisations.

The finding that 53% of UK workers have exaggerated an expense claim is based on responses from 1,861 UK workers who have access to a business expense account.

The rest of the research is based on responses from those 1,000 UK workers who have exaggerated a business expense claim. It was conducted in April 2012 in collaboration with One Poll.

Key findings: