If you hire staff who pay for travel, software, or stock, an expense card removes the reimburse-and-claim cycle and gives you real-time visibility. This guide covers how the cards work, which controls to set, and what HMRC expects before you issue a single one.
You can rely on the tax points below: we checked them against HMRC’s own guidance in June 2026, and the provider features against each platform’s own pages.
How Employee Expense Cards Work
Think of an employee expense card as controlled access to your own money, not a loan to your staff. It draws on your business account or a ring-fenced budget you set, so the employee never spends personal funds and never files a manual claim.
You stay in control the whole time. 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 spend and virtual cards you can create instantly.
When you pay a supplier or a recurring subscription, lock a virtual card to that one supplier and cancel it once the job is done — handy for a one-off contractor payment or a subscription you don’t want renewing forever.
Setting Spending Limits and Category Controls
Write the policy before you issue a card. Decide who gets one, what budget applies, and which categories are allowed — then let the platform enforce that policy at the point of purchase rather than after the fact.
- Per-card spending limits. Set a maximum transaction amount or monthly budget per card. Hit the limit and the card declines automatically, with no action from your finance team.
- Merchant category controls. Block or restrict specific merchant category codes — entertainment, hotels, cash withdrawal — so policy is enforced when the card is tapped, not 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 with regular but predictable spend.
- 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.
You can usually adjust limits in real time from the admin dashboard. If someone needs more headroom for a specific trip, grant a temporary increase and revert it once the trip is over.
You want controls that bite at the till, not a clean-up later — we rate enforce-at-purchase every time. Controls beat clean-up.
HMRC and Tax: What You Have to Get Right
Don’t assume the card is a tax-free perk to you or your staff — it isn’t a benefit either way. What matters to HMRC is what your employee buys with it, not the card mechanism. We checked the points below against HMRC’s own guidance.
Spend on legitimate business costs — travel, accommodation, subsistence, equipment — isn’t a taxable benefit to the employee, provided you have a proper expense policy and adequate records. HMRC expects you to show the spend was wholly and exclusively for business.
Watch client entertaining, though: you can rarely reclaim the VAT or deduct it for Corporation Tax, so keep it separate from the costs above.
- VAT receipts. To reclaim VAT as input tax you must hold a valid VAT invoice — a card statement alone won’t do. Receipt capture in expense platforms fixes this by prompting employees to photograph the receipt at the till.
- P11D reporting. If an employee uses the card for personal spend that isn’t repaid to the business, you may have to report it as a benefit in kind on a P11D. Clear category controls and receipt matching cut the risk of personal spend slipping through.
- Benchmark rates and PSAs. Reimbursing at HMRC approved rates doesn’t need reporting — for example the Approved Mileage Allowance Payments, raised to 55p a mile for the first 10,000 miles for the 2026/27 tax year (from 45p, backdated to 6 April 2026), then 25p above that. Subsistence above benchmark rates needs either a PAYE Settlement Agreement or P11D reporting.
- 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 a searchable archive meets that far more reliably than a shoebox of paper.
If you’re unsure how a specific category should be treated, check it with your accountant or against HMRC’s Employment Income Manual before you assume. The card makes the records tidy; it doesn’t make the judgement for you.
What to Look for in a Provider
Compare on the things that bite once you have a team on the cards, not the marketing headline. Five features decide whether a platform works in practice.
- Cards included in the base price. Some providers charge per card; others include a fixed number. If you’re issuing cards across a large team, per-card fees add up fast.
- App quality. Your employees live in the app for receipt capture and spend visibility. A clunky app means poor adoption and incomplete records — exactly the gap that breaks your VAT reclaim.
- Accounting integrations. Direct links to Xero, QuickBooks, or Sage are standard. Check the integration pushes the detail you need — VAT codes and nominal mapping — not just transaction totals.
- Approval workflows. Larger teams need multi-level approval before a transaction posts. Payhawk and Moss support configurable approval chains; Soldo is stronger at pre-spend control but lighter on post-spend approval.
- Support. When a card declines or a transaction won’t sync, your employee needs a fast fix. Check whether you get phone support or only email and chat, and what the published response times are.
On the UK landscape as of June 2026, we’d shortlist Moss (strong SME focus and Xero integration), Payhawk (enterprise-grade controls for larger teams), Soldo (a straightforward prepaid model with solid category controls), and Wallester (flexible issuing when you need a high volume of cards).
Match the platform to your team size and your accounting stack, then confirm current pricing on the provider’s own page — plans change.
Common Problems and How to Avoid Them
- 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 the employee to resolve the gap before month-end; some platforms let you freeze a card until receipts are uploaded.
- Cards used for personal purchases. Category controls and merchant blocks cut this sharply. Make the policy clear about what counts as a business purchase and have employees sign an acknowledgement when you issue the card.
- Cards not cancelled when someone leaves. Put card cancellation on your offboarding checklist. Platforms with HR-system integrations can automate the step so a leaver’s card dies on their last day.
- Budget overruns from shared cards. Don’t share one card across a team — you lose the ability to attribute spend to a person and you create reconciliation headaches. Issue individual cards instead.
- Wrong cost-centre allocation. Train 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.
Expense Cards for Employees FAQs
Do employees need a credit check to receive a business expense card?
No. Business expense cards from platforms such as Soldo, Moss, or Payhawk are prepaid or linked to the company account, not to the employee’s personal credit. The card is issued under the business’s account with no credit check on the individual, which makes them easy to issue to new starters, contractors, or part-time staff.
What happens if an employee spends beyond their limit?
In most cases the transaction is simply declined at the point of sale. An employee can’t overspend a prepaid balance, and per-transaction or per-period limits enforce the same outcome. Some platforms send the manager a real-time alert as a card nears its limit, so you can decide before the employee is stuck at a supplier.
Can expense cards be used for recurring supplier payments?
Yes, and virtual cards suit this well. Create a virtual card with a set budget and assign it to a single supplier for a subscription; if you need to cancel, delete the card and the supplier can’t charge again. That’s far more controlled than sharing a physical card or handing out your main account details.
Methodology and Disclosure
Sources: We checked the tax and VAT points against HMRC’s own guidance on expenses and benefits, VAT input tax, record-keeping, and the Approved Mileage Allowance Payments on 2 June 2026. Provider features reflect each platform’s published product information, current as of June 2026.
Not advice: This is editorial guidance, not regulated tax advice. Verify current pricing and compliance with the provider and, for edge cases, a qualified accountant.
Affiliate disclosure: BusinessExpert may receive referral fees from some providers mentioned on this page. This doesn’t affect our editorial assessments.