Even when they're trying to meet all their legal obligations, company directors dread URSSAF checks, for fear of having missed something and being subject to an adjustment. During these checks, particular attention is paid to expense reports, especially when the company has many employees and records frequent business expenses. Business expenses are the cause of 36% of URSSAF reassessments.
Here's what you need to know to avoid being penalized.
Why are costs closely monitored?
When expenses are incurred for business purposes, they are considered to be business expenses. In this case, they are deductible from sales and exempt from social security charges.
On the other hand, for certain types of expenditure, the amount of VAT is deductible for the company.
On the employee's side, reimbursement of business expenses is not included in the base for calculating income tax.
For example, some companies are tempted to inflate the amount of business expenses in order to reduce profits or collect VAT. They may also use them to provide additional remuneration for the employee, without this being subject to social security contributions or income tax. This trend justifies the particular attention paid by auditors to this part of the company's expenses.
Conditions for reimbursement of business expenses
If an employee rents a car for a business trip, he or she can be reimbursed for the full cost of the rental, fuel and tolls. To do this, they must keep all the corresponding invoices.
If he uses his personal vehicle to go to appointments, he can be reimbursed by mileage allowances. These must correspond to the scale defined by the tax authorities. To benefit from these allowances, the employee must indicate the reason for the trip, the date and place of the mission, and the number of kilometers traveled for business purposes on the expense report.
Please note that kilometers traveled between home and work do not need to be taken into account by the employee. In fact, these expenses are already covered by the 10% deduction applied to the tax return.
Meals and accommodation
During a business trip, accommodation expenses may be reimbursed if: + the distance between the employee's home and the place of work is greater than 50 km + the journey takes less than an hour and a half by public transport.
Expenses incurred for business meals may be reimbursed if the employee specifies the reason for the meal, as well as the name, position and contact details of each person invited by the company.
Things to bear in mind when reimbursing meal and accommodation expenses: + The reimbursement of more than 5 business meals per month for one and the same employee may be requalified as a benefit in kind. To avoid this, it is necessary to be able to prove that these meals are justified for the company. + the amount of lunches charged to expense accounts must be deducted from the balance of the employee's meal vouchers, if he or she benefits from them + VAT on hotel expenses is not deductible.
If telecommuting is proposed by the employer, the law requires that the employee pay a proportion of the costs incurred. This may be a percentage of the rent, or part of the Internet and cell phone package. However, the employer may not pay more than 50% of the bill.
Compensation for out-of-pocket expenses
Business expenses can be reimbursed in 2 different ways: + lump-sum compensation: this covers travel, catering and accommodation expenses, and must correspond to the scale updated annually by URSSAF. Each category of expense has its own specific scale. If reimbursement exceeds the ceilings set by URSSAF, the additional amounts are subject to social security contributions. In the case of lump-sum reimbursements, the employee is not required to provide proof of the nature of his expenses. Actual compensation: the sums advanced by the employee are reimbursed in full, subject to presentation of valid receipts.
How to avoid URSSAF reassessment?
Be in possession of the correct supporting documents
The absence or inadmissibility of a receipt is the main reason why companies are subject to tax reassessment. In the case of actual compensation, an expense claim without supporting documentation simply cannot be reimbursed. Otherwise, the expense may be reclassified as a benefit in kind and subject to tax reassessment.
On the other hand, only an invoice from the establishment mentioning its name, address and the date of the expense constitutes valid proof. Credit card slips, receipts and invoices that do not include all the required information are therefore not eligible for reimbursement.
Compliance with social security exemption ceilings
URSSAF has set ceilings for each type of expense. You are free to exceed these ceilings, but you must pay the corresponding social security contributions. If you don't, you risk another tax reassessment for non-payment of social security contributions.
Choosing the right compensation method
Some expenses must be reimbursed on a flat-rate basis, others on an actual basis. For example, you can't decide to reimburse an expense for which proof is missing on a flat-rate basis, or to reimburse mileage expenses on an actual basis.
Ensure the consistency of the amounts covered
If the amounts of the expense claims seem disproportionate, the tax authorities may choose to requalify the expenses as a benefit in kind. In this case, they will be subject to social security contributions for the company, and the employee will have to include them in his income tax return.
By setting up a simple and efficient expense management system, you can save your employees time, while meeting legal obligations. A solution such as the application offered by the neobank Anytime with its pro account can make it easier for you to respond to requests from the tax authorities, and thus avoid tax reassessment.