MPs and staff employed by HM Revenue & Customs have come under fire in recent months following revelations that they can obtain substantial sums in expenses without having to produce any receipts.

Details of MPs' expenses, obtained under Freedom of Information laws, shows that MPs have been able to claim tens of thousands of pounds in mortgage payments and thousands for fitting out their homes without being required to show any bills or invoices.

Meanwhile further details obtained under FOI rules show that Revenue staff have been able to claim accommodation allowances of up to £100 a night and meal allowances of up to £20 without producing any receipts.

But now the revelations about these uncertified expenses may have led the Revenue to take a more lenient approach to expenses claims from the general public.

Nichola Ross Martin, tax editor of accountingweb.co.uk, a specialist taxation website, says the furore over expenses that MPs and Revenue staff may claim without providing receipts could have played a part in triggering some little publicised changes to the Revenue rules governing the general treatment of expenses.

She says the Revenue’s latest Employment Income Manual, published in February, makes clear that ordinary employees, as well as MPs and Revenue staff, may not have to submit receipts for all their expenses claims. She says: “This change could potentially affect millions of people, yet it has gone virtually unnoticed.”

The manual says that employers can be allowed to agree their own ‘in house’ set of what are called ‘scale rate’ payments to reimburse exmployees for business expenses. Once a scale rate has been agreed, it can be paid without the need for employers to ask for - or employees to submit - receipts.

Although the Revenue suggests that scale rates would apply to areas such as subsistence, Ms Ross Martin says she sees no reason why scale rates should not be applied across the board, covering things like travel and accommodation expenses, where these are incurred on a reguilar basis. She adds: “The Revenue has already published details of scale rates for overseas travel expenses so there is absolutely no logical reason why the same approach should not be applied within the UK.”

The way the system is expected to work is that a company based in Guildford, which has staff travelling regularly to meet clients in London, could establish a scale rate for the London-Guildford journey, based on the average of a random sample of exployees’ expenses claims over a month. It would then pay the scale rate for the journey without staff having to submit receipts each time. In the same way the company could agree a scale rate payment for accommodation and subsistence.

Ms Ross Martin says: “The relaxation in the Revenue guidelines governing expenses receipts is very welcome and could benefit millions of people. It’s just a pity that the Revenue hasn’t exactly gone out of its way to publicise the changes.”

In the past few months both Revenue staff and MPs have come under fire after it was revealed that they can claim a range of expenses without automatically having to submit receipts. Hacker Young, the accountant, used the Freedom of Information Act to establish that Revenue staff could claim up to £100 for an overnight stay in London, and up to £20 for an evening meal, without having to produce a receipt.

A Revenue spokeswoman says: “We have to keep receipts for all expenditure above £10 and even though we may not have to submit them automatically we must be ready to produce them if required. If other people realise that they can benefit from scale rate payments that is a positive thing.”

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