Urssaf and expense claims: how can you avoid being reassessed?
Urssaf and expense claims... it's a question that worries companies. And with good reason: a tax reassessment can happen very quickly, often because of a simple error rather than a genuine desire to cheat.
The Urssaf is a public body that monitors compliance with regulations, and one of its missions is to combat fraud and concealed benefits in kind... and this involves checking expense claims.
So whether you're a company, a self-employed person or an association, you need to be as rigorous as possible.
What are the best practices to follow to avoid pitfalls in the event of an audit? We tell you all about it in this article co-authored with Charlène Serayet, managing director of Dasmind, a company specialising in administrative management.
What are business expenses?
There are many different types of business expenses. Let's take a look at the ones most commonly associated with expense claims:
Travel expenses
These are not expenses relating to the daily commute to work, but business travel (client meetings, attending conferences or seminars, supplier visits, etc.).
In these cases, the employee incurs a certain number of expenses, particularly for accommodation and transport. However, business travel expenses are only justified if the distance between home and the place of work :
- is equal to or greater than 50 km
- requires more than 1 hour 30 minutes by public transport (one way).
In addition, if the employee uses his or her own vehicle, allowances are applied in accordance with a mileage scale defined by Urssaf.
Finally, car hire by the employee, as well as petrol and toll charges, must also be paid for by the company.
How should these expenses be handled? See this article dedicated to the reimbursement of travel expenses.
Meal expenses
Again in the context of business travel, employees' personal meals may be reimbursed under certain conditions.
But meal expenses can also be incurred for business lunches, for example with a client or prospect.
Other business expenses
Finally, there are other business expenses, such as those relating to teleworking or the purchase of equipment needed to carry out the assignment.
How are business expenses reimbursed?
There are several ways of reimbursing business expenses:
Reimbursement of actual expenses
This is based on receipts and reimburses the exact amount spent by the employee. The constraint is that the employee advances the money before being reimbursed by the company.
Flat-rate reimbursement
This means that the employee is always reimbursed the same amount according to scales established and updated by Urssaf. This type of reimbursement covers :
- accommodation
- meals
- the use of a private vehicle for business purposes,
- professional mobility within the country.
In this case, the employee does not have to provide receipts, but must specify the reasons for the expenses incurred.
Urssaf inspections and expense claims: 6 best practices to be observed in 2024
⚠️ Urssaf remains particularly vigilant on the issue of business expenses, because some companies are not playing the game. There are a number of reasons for this:
- business expenses are exempt from social security contributions;
- VAT is deductible on certain expenses, for example :
- tolls
- diesel fuel (but not petrol),
- meal expenses,
- breakfasts or drinks for hotel accommodation, etc. ;
- reimbursement of business expenses is not taken into account when calculating income tax.
Some organisations are therefore tempted to commit fraud in order to increase their profits or to offer benefits to their employees.
Tip: be particularly rigorous when managing your expense claims!
Tip 1: Keep receipts
The absence of supporting documents for actual expense claims is the first reason for an adjustment by Urssaf, which then considers the expenses concerned to be benefits in kind.
This is why you should always have valid supporting documents in your possession.
Invoices, notes... make sure that these various documents include all the compulsory information:
- the name of the establishment concerned (hotel, restaurant, etc.),
- its address
- the date of the transaction
- the amount.
Finally, since it is possible in certain cases to benefit from a VAT deduction, make sure that all supporting documents are drawn up in your company's name.
☝️ In the case of a business lunch, the document must also specify :
- the reason for the meal
- and the names, positions and contacts of guests.
A word from the expert
Expense claims are used in almost all companies, to reimburse employees for expenses incurred on behalf of the company. However, even if this system is very practical, it is nonetheless regulated.
An expense claim must include the compulsory items listed above.
If the expense statements do not comply, or if they are missing, the company is exposed to a reclassification of the expenses, which could lead to additional social security contributions.
To avoid this, make sure you are vigilant about compliance and the presence of supporting documents for expenses. You can use software or simply create a filing form with the mandatory fields (less costly for small teams).
Tip 2: Respect the tax exemption threshold
Are you opting for flat-rate reimbursement? Then don't exceed the ceilings predefined by Urssaf. Otherwise, the company must subject the additional amounts to social security contributions.
💡 To avoid any inconvenience, we recommend that you define a spending policy to clearly communicate to employees what the limits are that must not be crossed.
Tip 3: Choose the right reimbursement method
Always choose the right reimbursement method.
For example, if you don't have a receipt, opt for a flat-rate reimbursement.
You should also bear in mind that you cannot switch from actual mileage expenses to actual mileage expenses.
Finally, note that flat-rate reimbursement does not apply to company directors. They must opt for reimbursement of actual expenses (excluding mileage allowances), with supporting documentation.
Tip 4: Stay vigilant about expense claim fraud
Without being in bad faith, a company can be careless when it comes to the expense claims provided by its employees, and expose itself to risks as a result. So stay vigilant and check your employees' receipts... before Urssaf does it for you!
Voluntary expense fraud also exists. Getting invited to a restaurant but getting the bill back so that you can be reimbursed, asking the taxi driver to inflate the bill... these are all examples of cheating practised by some employees. The solution? Apply a genuine expense management and control policy.
Tip no. 5: avoid excessive or inconsistent expenditure
Urssaf is perfectly capable of judging whether expenses are too high or inconsistent in relation to the reasons given. If this is the case, the body will consider them to be benefits in kind (concealed), and therefore subject to social security contributions.
For example, lunches in a restaurant with a client are allowed. But if your family joins in the meal, it will look dubious.
So make sure that expense claims are for useful and reasonable expenditure, in the interests of the company and its activities.
☝️ You should be aware that if a single employee has more than 5 business meals per month, Urssaf may also deduct this as a benefit in kind. That's why you need to be able to justify that all these lunches are necessary for the smooth running of the business.
Tip no. 6: Prevent mistakes by getting help
Avoiding mistakes... this advice may seem obvious, but many companies have had their accounts audited because of flaws that were not the result of dishonest behaviour, but just simple clumsiness. For example, the manual management of a large number of expense claims sometimes leads to an expense being claimed twice, a practice considered fraudulent!
That's why it's important to pay the utmost attention to these operations, and to get help if you need it:
- with software. Software exists to help you manage your expense reports. Eurécia Notes de frais, a module of the Eurécia HR software, enables employees on business trips to record their expenses and transfer receipts from their mobile phone. Everything is automatically forwarded to the line manager for validation and processing. Reimbursement terms and conditions and validation rules are defined upstream. This avoids the risk of errors and, above all, the loss of documents.
- by a professional. For example, Urssaf has advisers on hand to help you through the process. You can even voluntarily request an audit to ensure that your expense claims are being processed correctly.
Article translated from French