Revealed: Crazy employee expense claims and how to tame them
Posted 20th November 2025 • Written by Shane Duffy on thehrdirector.com • • • • • •
A new review of UK business expense filings reveals that when it comes to claiming tax relief, some employees and business owners are stretching the rules beyond belief. Far from simply forgetting a receipt, these claims highlight a fundamental disconnect between HMRC’s rules and a claimant’s personal definition of a ‘business necessity’.
This remarkable catalogue of dubious expenses, serves as a crucial, if humorous, warning for every HR department and finance team. When taxpayers push the definition of “wholly and exclusively” for trade, the fallout is tax repayment, penalties, and costly HMRC investigations.
Here are some of the most bizarre and memorable claims that have been rejected by HM Revenue & Customs (HMRC) over the last two decades, followed by essential advice on tightening your own expense policy.
The Most Problematic Expenses Vetting Teams Have Faced
These examples, drawn from HMRC’s own public records, showcase the lengths some individuals will go to, often resulting in swift rejection for having a “duality of purpose”—that is, being partly for personal benefit.
- The £1,125 Chippy Habit: One worker attempted to expense over £1,000 for daily sausage and chip lunches, claiming the subsistence was essential to maintain energy for their trade. The Reality for HR: General meals consumed during normal working hours are a personal living expense, not a business cost.
- The Guard Dog Deduction: The owner of a family Shih Tzu tried to claim a full year’s pet food and insurance, arguing the small dog acted as a necessary “guard dog” to protect confidential business documents kept at home. The Reality for HR: If an item is a family pet, it has an undeniable personal use, making the entire cost disallowed.
- The Decorator’s Designer Gear: A self-employed decorator submitted receipts for expensive Armani jeans, classifying them as “protective clothing” for work. The Reality for HR: Only specialist workwear, safety equipment, or a company uniform meets the criteria. Designer brands do not qualify.
- The Unnecessary Trip: An individual tried to expense flights and hotel costs for a personal Caribbean holiday, citing the need for a ‘decent break to recharge my batteries’ due to work stress. The Reality for HR: Staff holidays do not constitute a business expense. Full stop.
- The Below-the-Belt Deductions: Claims have included tax relief for woolly underwear to keep warm, as well as the truly unusual case of Ann Summers lingerie, which the claimant stated was required to help them feel confident at work. The Reality for HR: Personal clothing, including underwear, falls outside of acceptable claims, irrespective of the confidence boost it may provide.
- The Botox Treatment: One business owner submitted receipts for Botox injections, claiming the cosmetic procedures were necessary to maintain a professional image when meeting high-profile clients and secure future contracts. The Reality for HR: The expense is deemed personal maintenance and is not ‘wholly and exclusively’ required for the trade.
Compliance Corner: Tighter Policies Mean Fewer Penalties
These examples are a lighthearted way to address a serious business issue: managing risk and compliance. When HMRC discovers disallowed claims, your company or the individual employee is liable for the full tax repayment plus significant penalties.
Shane Duffy, MD at Click Offices, advises that HR and Finance teams must ensure employees understand three core principles to mitigate risk:
- Reinforce the ‘Wholly and Exclusively’ Rule: The golden rule of expenses must be clearly communicated. Ask staff, “Would I be spending this money if I didn’t have this business?” If the answer is yes, or partly yes, it is not an allowable expense.
- Mandate Fair Apportionment of Dual-Purpose Costs: For items used for both work and home (like a mobile phone or broadband), the business portion is claimable, but this must be justified with detailed usage records. Overestimating this split is a common and easily flagged error.
- Insist on Iron-Clad Documentation: Employees must retain digital copies of all receipts and invoices for at least five years after the 31 January submission deadline. If an expense cannot be proven, it cannot be claimed. No receipt, no claim—period.
Adopting a robust, non-negotiable expense policy that explicitly addresses “duality of purpose” is the single most effective way to protect your business from unnecessary penalties and the stress of an HMRC investigation.
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