If your business handles expense claims in a spreadsheet, there is nothing wrong with that. The problem is usually the spreadsheet itself: the VAT is not split out and mileage is typed in as a lump sum. When your accountant or HMRC asks how a figure was reached, the file cannot answer.
This guide gives you a free expense report template in Excel, built for UK businesses, plus a filled-in example and the fields that make a claim hold up. Download the expense report template (Excel).
Table of contents
What makes an expense report valid for HMRC and your accounts
HMRC does not publish an official expense form for employees, so no single layout is mandatory. What it does expect is that every business expense can be traced back to evidence and explained. In practice, an expense report needs five things to do that job.
First, who and why. The name of the person claiming, their role, and the business purpose of the spend (“client visit to Manchester”, not “travel”). Without a purpose, an expense is hard to defend as wholly business.
Second, one line per expense, with the date, a short description and the amount. Grouping a week of meals into a single line makes it impossible to match the claim to receipts.
Third, the VAT split. If your business is VAT-registered, you can only reclaim input VAT when you hold a valid VAT invoice or receipt from the supplier. Recording the VAT amount separately on each line saves your bookkeeper from recalculating it, and makes it obvious which costs carry no VAT at all, such as UK flights or train tickets.
Fourth, mileage shown as miles and a rate, never as a round sum. HMRC’s approved mileage allowance for cars and vans is 55p per mile for the first 10,000 business miles in a tax year (45p before 6 April 2026), then 25p per mile after that. Motorcycles get 24p and bicycles 20p. Pay more than this and the excess becomes taxable for the employee.
Fifth, approval. A manager signature and a finance sign-off show the claim was checked before it was paid.
Then keep everything. A limited company must keep its accounting records, receipts included, for 6 years from the end of the last financial year they relate to. Sole traders must keep records for at least 5 years after the 31 January submission deadline of the relevant tax year.
If you are setting these rules for a team, write them down once in an expense policy. Our expense policy guidelines with practical examples covers what to include.
The free template: how to use it
The workbook has three tabs: a blank expense report, a completed example, and a short guide with the 2026/27 HMRC rates and the VAT receipt rules. Here is how to fill in the report.
- Complete the header: name, job title, department, email, employee ID, the claim period and the manager who approves it.
- Pick the vehicle you use for business journeys and enter the business miles already driven this tax year. The sheet applies the right HMRC rate: 55p a mile for a car or van, 25p once you pass 10,000 miles, 24p for a motorcycle, 20p for a bicycle.
- Enter one receipt per line, with the date, what it was for and a category from the drop-down list. Lines are numbered R1 to R15: write the same number on the receipt or its scan.
- Say who paid. Spend on a company card stays on the report for the record but is deducted from the amount due, and so is any cash advance.
- Enter the amount including VAT, and the VAT shown on the receipt. For a journey in your own car, enter the miles only.
- Check the amount due at the top, sign the declaration and send it for approval with the receipts.
You can also use the sheet as a simple expense tracker through the month, adding lines as you go rather than rebuilding everything on the last day.
Filled-in example
The second tab of the template shows a completed claim, with fictional names and amounts. Elise, a marketing manager based in London, spends two days at a client workshop in Manchester in September 2026.
| Receipt | Description | Paid with | Amount | VAT |
|---|---|---|---|---|
| R1 | Return train London to Manchester | Personal card | £89.40 | £0.00 |
| Drive home to the station and back, 36 miles at 55p | Mileage | £19.80 | n/a | |
| R2 | Hotel, 2 nights | Company card | £240.00 | £40.00 |
| R3 | Dinner alone, overnight stay | Personal card | £36.60 | £6.10 |
| R4 | Lunch with a client, 2 people | Personal card | £54.00 | £9.00 |
| R5 | Taxi to the station | Personal card | £14.50 | £0.00 |
| Total | £454.30 | £55.10 |
The claim totals £454.30, but Elise is owed £214.30:
- The hotel went on the company card, so it is deducted.
- The train fare carries no VAT because UK passenger transport is zero-rated.
- Her dinner during an overnight stay counts as subsistence, so its VAT can be reclaimed.
- The client lunch is business entertainment: the business can pay for it, but its VAT is blocked, which is why the summary shows £46.10 of reclaimable VAT rather than £55.10.
Elise signs the declaration, her manager approves the claim, and finance pays the £214.30 in the next reimbursement run.
Common mistakes to avoid
Missing receipts
A line with no receipt behind it is a line your accountant cannot support. If a receipt is lost, ask the employee to write a short signed note explaining the expense, and treat this as the exception.
Claiming VAT without a VAT receipt
A card terminal slip is not a VAT receipt. Without the supplier’s VAT number and the VAT amount, the input VAT cannot be reclaimed, so record the gross amount and leave the VAT cell at zero.
Reclaiming VAT on client entertainment
The VAT on a meal with a client or supplier cannot be recovered. Record it as entertainment with the VAT cell at zero, and note who attended.
Mixing personal and business spend
If an employee adds a partner’s meal to a business dinner, split the bill on the form and claim only the business part.
Claiming the commute
Travel between home and a permanent workplace is ordinary commuting and is not a business expense. Travel to a temporary workplace, like Elise’s trip to Manchester, is.
Paying mileage above the approved rate without reporting it
Anything above 55p a mile (or 25p after 10,000 miles) is taxable for the employee and needs to be reported.
Submitting claims late
A claim submitted three months after the trip is harder to check, and receipts go missing in between. A monthly deadline, written into your policy, solves most of this.
For a refresher on the basics, read what expense claims are and how they work, and for the mileage rules in more detail, see our guide to mileage allowances for small businesses.
When to move from spreadsheet to software
A spreadsheet works well for a handful of claims a month. It starts to cost you time once several people claim every month and someone in finance spends a day matching lines to receipt images, then re-keying totals into the accounts.
Another sign you have outgrown the template: approvals happen in email threads, so nobody can tell which claims are signed off.
At that point, an expense management app takes over the manual steps. With N2F, employees photograph receipts on their phone, the amount, date and VAT are read automatically, mileage is calculated from the journey, and managers approve from their phone. Finance exports the result straight to the accounting software. Our guide on how to choose the right expense claims app lists the criteria worth comparing before you switch.
Download your expense report template
A good expense report answers three questions without anyone having to ask: what was spent, why, and who approved it. The template covers all three, with the 2026/27 mileage rates, the VAT split and the amount due already built in.
Download the free expense report template (Excel) and add your company name to the header. When the spreadsheet starts slowing your team down, see how N2F handles expense reports.
