Everything you need to know about keeping paper or electronic expense claims
Keeping expense claims and supporting documents entails a number of obligations that you should be aware of to avoid any risk of penalties.
Given that certain expenses are exempt from charges, the authorities may carry out checks to ensure that the company is in order and not disguising benefits in kind, for example.
How long should I keep invoices and receipts for business expenses? In the age of electronic invoicing, are there different rules for scanned expense claims?
Expense claims and supporting documents: a quick reminder
An expense claim is a form filled in to declare expenses incurred by the employee in the interests of the company, to which is attached the expense claim document proving the expenditure.
It may be a paper document, but more and more administrative departments are opting for the dematerialised expense claim. In this case, the form is scanned or edited using a dedicated application, and the supporting documents are photographed or scanned, then attached and stored on a server.
The retention period for expense claims
Since 1 January 2019, the law on the financing of social security has included an obligation to keep the documents and supporting evidence needed for Urssaf to calculate the basis of assessment and audit social security contributions for a minimum of 6 years.
☝️ However, Article L 123-22 of the French Commercial Code stipulates that accounting documents and supporting evidence must be kept for 10 years from the end of the financial year. Expense claim receipts are also used for bookkeeping purposes, so it's best to keep them for 10 years, to be on the safe side.
✅ If you don't want to fill your cupboards or shelves with receipts for a decade, dematerialisation is a good option.
They'll be that much easier to find in the event of an Urssaf inspection, thanks to a search by date or keyword.
What's more, you won't have to worry about disappearing ink, dates or amounts!
But does it have the same value as the original expense claim and supporting documents?
Retention and dematerialisation: the law adapts
Since the decree of 23 May 2019 of the Social Security Financing Act discussed above (article L.243-16 of the Social Security Code), the digitisation of expense claim receipts has evidential value, i.e. legal value.
However, there are a number of conditions that must be met if digitised receipts are to have the same evidential value as paper receipts:
- the receipt must be reproduced identically to ensure that it is a true copy of the original;
- the format chosen must be unique so that it can be read and processed by all systems over the long term (PDF format or PDF A/3 format (ISO 19005-3));
- digitisation must comply with the one-star general security reference system (RGS), including a time-stamping system that can trace the various operations carried out.
⚠️ All expense claims (and supporting documents) dating from before 1 July 2010, the date on which the decree came into force, must be kept in paper format in order to be legally valid.
Why keep your expense claims?
Keeping expense claims meets 2 obligations and objectives. It provides proof to the tax authorities:
- firstly, that the reimbursements relate to business expenses and not personal expenses;
- secondly, that they are eligible for VAT recovery, which is not the case for all expenses.
In the event of an Urssaf audit
We've already mentioned this, but it's Urssaf that sets the rules and carries out random checks or checks where fraud is suspected (such as the disguised benefit in kind mentioned in the introduction).
Keep all supporting documents such as :
- proof of meal expenses (receipt from the restaurant, caterer or supermarket),
- taxi bill
- hotel bill,
- toll or parking ticket,
- mileage allowance with departure and arrival addresses, vehicle registration document, etc.
To reclaim VAT
VAT can be reclaimed on certain business expenses.
In order to claim a refund when filing your VAT return, you may need to provide supporting documents showing the amount of VAT.
Possible penalties for failure to keep expense claims
Article 1734 of the General Tax Code provides for a fine of €10,000 if the documents requested by the tax authorities are not provided before the prescribed deadline.
In the absence of supporting documents, Urssaf may also reclassify business expenses as benefits in kind:
- the company will then have to pay the social security contributions due ;
- the employee will have to pay tax on the benefit in kind.
According to Mooncard, 36% of Urssaf reassessments are due to poor management of expense claims. A good reason to keep a close eye on your expense accounts.
How can you optimise the management of your expense reports?
One final tip: with digital archiving, not only are your documents safe and traceable, but you also save on storage space and money.
If you're interested in a professional solution for managing your expense reports, our directory is full of tools that incorporate :
- OCR technology for scanning and automatic character recognition, in particular of amounts, dates and types of expense on receipts,
- archiving of your receipts with probative value,
- automatic classification of expense types by category,
- detection of recoverable VAT,
- connection with your accounting and payroll software for reimbursements.
You'll save precious time and avoid forgetting or making data entry errors. Are you convinced?
Article translated from French