Expense Cards for Employees: How They Work and What HMRC Expects

If employees pay for travel, software or stock, an expense card removes the reimbursement cycle and lets you see the spending as it happens. The decision to make first is who gets a card and what they may buy. Set those rules before issuing anything, because changing a live card programme is harder than starting with a clear policy.

We checked the tax treatment against HMRC’s guidance and the provider features against each platform’s pricing page on 5 October 2026. That work also corrected our earlier account of Wallester.

How Employee Expense Cards Work

An employee expense card is controlled access to your own money, not a loan to your staff. It draws on your business account or on a ring-fenced budget you set, so your employee never spends personal funds and never files a manual claim. You set the budget, the permitted categories and any merchant restrictions, and every transaction is visible to your finance team the moment it happens.

Use a virtual card for anything you pay online. Most platforms issue physical cards for in-person spending and let you create virtual ones instantly, which matters more than it sounds: when you pay a supplier or a recurring subscription you can lock a virtual card to that one supplier and cancel it the moment the job is done. That is the difference between a one-off contractor payment that ends when the work ends and a subscription that quietly renews for three years because nobody remembered which card it was on.

Setting Spending Limits and Category Controls

Set the policy before issuing a card. Decide who gets one, what budget applies and which purchases are allowed, then let the platform enforce those rules at the point of sale. Per-card limits, merchant blocks, time limits and project tags each control a different part of the spending.

• Per-card spending limits. Set a maximum transaction amount or a monthly budget per card. Hit the limit and the card declines automatically, with no action needed from your finance team.
• Merchant category controls. Block or restrict whole categories of merchant, such as entertainment, hotels or cash withdrawal, so the policy is enforced when the card is tapped rather than in a month-end review.
• Time-based limits. Some platforms allow daily, weekly or monthly caps separate from the overall balance, which suits field teams whose spending is regular and predictable.
• Project or cost-centre allocation. Tag cards or individual transactions to a project, department or client, so the cost lands in the right place in your accounts without anyone re-coding it later.

Real-time changes are useful when someone needs extra headroom for a trip, because you can raise the limit temporarily and reduce it afterwards. The better protection is still the rule that stops an unauthorised purchase before it happens. That leaves your finance team dealing with an exception instead of trying to recover money after the purchase.

HMRC and Tax: What You Have to Get Right

The card itself is not a taxable benefit, and it is not a tax-free perk either. What matters to HMRC is what your employee buys with it, not the mechanism they used to pay. Spending on legitimate business costs, meaning travel, accommodation, subsistence and equipment, is not a taxable benefit to the employee, provided you have a proper expense policy and adequate records to show the spending was wholly and exclusively for business.

Client entertaining is the exception worth separating out from the start. You can rarely reclaim the VAT on it or deduct it for Corporation Tax, so keeping it in its own category from day one saves your accountant unpicking it later.

• VAT receipts. To reclaim VAT as input tax you must hold a valid VAT invoice, and a card statement alone will not do. Receipt capture in expense platforms fixes this by prompting your employee to photograph the receipt at the till, while they are still standing there.
• P11D reporting. If an employee uses the card for personal spending that is not repaid to the business, you may have to report it as a benefit in kind on a P11D. Category controls and receipt matching cut the risk of personal spending slipping through unnoticed.
• Benchmark and mileage rates. Reimbursing at HMRC approved rates needs no reporting. The Approved Mileage Allowance Payment rate for the 2026/27 tax year is 55p a mile for the first 10,000 business miles and 25p a mile above that. Subsistence paid above the benchmark rates needs either a PAYE Settlement Agreement or reporting on a P11D.
• Record-keeping. Keep your VAT and Corporation Tax records, including receipts and transaction data, for at least six years. A platform that stores transactions, receipt images and approval records in one searchable archive meets that far more reliably than a drawer of fading paper.

We give receipt capture at the till the most weight because it helps you support a VAT reclaim while the evidence is still easy to collect. The platform can organise that evidence, but it cannot decide whether a borderline expense qualifies. Your accountant still needs to make that call.

What to Look for in a Provider

Start with the costs and controls your team will meet in daily use: how many cards the price covers, whether employees will use the app, what reaches the accounts, how approvals work and what help is available when a card fails.

• Cards included in the base price. Some providers charge per card and others include a fixed number, and the gap between them is wide. Soldo caps both its published paid plans at three cards, while Wallester includes 300 virtual cards and unlimited physical cards on a free plan. If you are issuing cards across a large team, that difference will dwarf the subscription.
• App quality. Your employees live in the app for receipt capture and spend visibility. A clunky app means poor adoption and incomplete records, which is exactly the gap that breaks your VAT reclaim.
• Accounting integrations, and which plan they are on. Direct links to Xero, QuickBooks or Sage are standard now. Check two things: that the integration pushes VAT codes and nominal mapping rather than transaction totals, and which tier it sits on. Wallester has the first and lists it on its free plan.
• Approval workflows. Larger teams need sign-off from more than one person before a transaction posts. Payhawk and Moss support configurable approval chains. Soldo is built around stopping the spend before it happens rather than approving it afterwards, which is a different model rather than a weaker one.
• Support. When a card declines at a hotel check-in or a transaction will not sync, your employee needs a fix that day. Check whether you get phone support or only email and chat, and what response times the provider publishes.

On the UK landscape in October 2026 the shortlist is Moss, Payhawk, Soldo and Wallester. We rate Moss the best fit for an SME filing in Xero, because its integration carries VAT codes rather than lump sums. Payhawk is the one to pick when your policy needs several approvers, and it has the lowest currency mark-up of the four at 0.3%. Soldo publishes its prices, Standard at GBP 27 a month and Plus at GBP 39 plus VAT, and both stop at three cards. Moss we could not price at all beyond its free tier, because it publishes no paid figure and quotes on transaction volume.

Wallester’s free plan is unusually generous on card volume, with 300 virtual cards and unlimited free physical cards. Its accounting links, added in December 2025, are listed on that plan too. Premium, at EUR 199 a month, adds 3,000 virtual cards and detailed analytics, so you do not need it to send coded transactions into your accounts.

Eligibility is worth settling before you shortlist rather than after. Wallester accepts UK-registered businesses and sole traders. Soldo requires an incorporated entity, so a limited company, a limited liability partnership or a registered charity, and turns sole traders away. Payhawk and Moss are both aimed at incorporated businesses too.

Common Problems and How to Avoid Them

Missing receipts, personal purchases, live cards left with former staff, shared cards and wrong cost codes are all easier to prevent than to untangle at year end. The practical fixes are simple, but they need to be part of the card policy from the start.

• Employees not capturing receipts. The most common problem, and the one that breaks your VAT reclaim. Set the platform to flag missing receipts automatically and require your employee to resolve the gap before month-end. Some platforms let you freeze a card until the receipts are uploaded, which works considerably faster than a reminder email.
• Cards used for personal purchases. Category controls and merchant blocks cut this sharply. Make the policy explicit about what counts as a business purchase, and have your employee sign an acknowledgement when you hand over the card.
• Cards not cancelled when someone leaves. Put card cancellation on your offboarding checklist. Platforms that integrate with staff-management systems can automate it, so a leaver’s card stops working on their last day rather than the following month when you notice a subscription still billing.
• Budget overruns from shared cards. Do not share one card across a team. You lose the ability to attribute spending to a person, and you inherit a reconciliation problem every month. Issue individual cards instead, which is precisely why the per-card allowance in the section above matters.
• Wrong cost-centre allocation. Train your employees to tag a transaction at the point of purchase rather than leaving it to finance. Most platforms let them add notes, tags and the receipt photo in the same step, and a tag applied at the till is worth three applied from memory a fortnight later.

Top Expense Cards for Employees

The choice comes down to how each provider funds the cards, how many users the price covers and what reaches your accounting software. We compared the published prices and plan details on each provider’s own page on 5 October 2026.

Two corrections are worth calling out, because we changed our own advice on both. Pleo Start is no longer free: it is GBP 8 per user a month, billed monthly, so the old reason to send a three-person team there has gone. And Wallester now has named Xero and QuickBooks support, added in December 2025, which the earlier version of this page said it lacked.

Check who is liable for the debt before you issue a single card, because the arrangements genuinely differ. Corporate liability means the company owes the money. Individual liability means your employee is personally responsible for it. Joint liability means both of you are. For a director of a smaller business that is not a technicality, and it is written into the terms rather than advertised on the pricing page.

Final Verdict

Comparing the published plans, we put Soldo first for most UK incorporated businesses issuing expense cards for the first time. The prepaid model, the per-card controls and the native accounting links cover the core job without an implementation project. Two things to check first: the plans stop at three users, and sole traders are not eligible at all.

Pleo is the one to look at when adoption is the risk, because its app is the reason people actually capture receipts. It is no longer the free option it used to be, so weigh Start at GBP 8 per user a month against Soldo at GBP 27 on what each includes rather than on the headline.

Payhawk fits from about 20 employees upward, where you need approval chains, several entities and a wider accounting stack. Below that you are paying for machinery you will not switch on.

Choose Wallester when card volume matters most. Its free plan includes 300 virtual cards and unlimited physical cards, and its pricing page lists accounting integrations on that plan too. Premium, at EUR 199 a month, adds 3,000 virtual cards and detailed analytics.

Whichever you pick, set the spend categories, the per-card limits and the receipt policy before you issue anything. Every one of these platforms works better when the policy behind it is already clear, and none of them will write that policy for you.

Expense Cards for Employees FAQs