Almost a quarter of expenses paid by companies to their employees during the recession were claimed fraudulently, claims new research.

It is estimated that UK firms forked out more than £8.8 billion to reimburse staff for expenses incurred during 2009. However, new research suggests that at least £2.1 billion of that should not have been paid as it was for fiddled and “out-of-policy” claims.

“At a time when businesses are having to cut costs wherever they can it seems ridiculous that many pay so little attention to the expense claims of their employees,” said Gordon Mowat of Aspire Management Services, leading business improvement specialists.

“It can be easy to understand why some firms might turn a blind eye to the odd spurious claim if it helps keep staff motivated and happy but with so much at stake it might be better to cut expenses rather than jobs.”

The findings come from the new GlobalExpense Employee Expenses Benchmark Report 2010 which draws on 7.7 million expense claims made by over 250,000 UK-based employees between December 2006 and November 2009.

The report covers £427 million in payments to employees and it provides the definitive picture of what employees really claimed and received in expenses over the last three years. The research found that most employers failed to reduce the number and value of expense claims made by staff during the most severe recession for over 30 years, despite claims by some 38 per cent of firms claiming to have cut business travel expenditure, 69 per cent saying they had cut the expenses staff are allowed to claim, and 55 per cent cutting back on entertaining clients.

According to the report, the average expense-claiming employee in the UK made 30 claims in 2009 (compared to 32 in 2008 and 30 in 2007 before the downturn) and the average expense claim in 2009 was for £55.50 (compared to £57.14 in 2008 and £55.34 in 2007).

“Overall, businesses have cut their employee expense bill by around nine percent, but this is almost entirely accounted for by the reduction in fuel prices dropping from a high in 2008,” explained David Vine, CEO of GlobalExpense. “Businesses have either made little effort to tighten expenses policies since the start of the recession, or spectacularly failed to implement them.”

Among some of the most unusual employee expense claims paid in 2009, identified by researchers, were an inflatable sheep, pig organs, lap dancers and pink furry handcuffs, which was bizarrely claimed as “stationery”.

The most expensive out-of-policy claims included a phone bill for over £88,000, the hire of a holiday villa at over £15,000 and a first class plane ticket that cost £11,314.

“When you consider that GlobalExpense estimate that at least 11 percent of all approved expenses don't comply with company policy, and that figure rises to 20 percent of all hotel claims and 29 percent of entertainment claims, it is staggering the amount of money hard-pressed companies are throwing away,” said Mr Mowat.

Employees are ensuring they get back every penny they pay out on company business with employees making claims for as little as 1 penny – to pay for a credit card fee!

“When you factor in that around 15 per cent of expense-claiming employees admit to fiddling their expense claims, I estimate that as much as £2.1billion of the £8.8 billion paid out by UK organisations to reimburse their employees should never have been paid,” added David Vine of GlobalExpense.