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There’s no such thing as a free lunch — unless it’s on expenses. Then it tastes mighty fine, even if it happens to be purchased from a motorway service station. Usually, I try to avoid feasting on sugary, processed food. But when travelling on business, “subsistence” allows you to buy all manner of filth and claim back the money you’ve spent.

I’ve signed off the purchase of Magnums before. In this hot weather, when you’re travelling on business, that’s legit right? Of course it is — even if, over the years, expenses have become more difficult to justify and to claim. However, to do expenses properly is an art and not a science.

How much our public servants are putting on expenses has been scrutinised by tabloids and broadsheet newspapers for nearly a decade. Politicians didn’t want to be seen taking a pay rise, but claiming vast amounts of their personal expenditure as “expenses” — who could forget that £1,600 floating duck island? — turned out to be even more scandalous.

This week, the Bank of England is on the naughty step. Yet spending by those in the private sector is far wilder and even more exuberant.

Indeed, chief executives won’t often be found in economy class (no Avios points) or in an Uber X (the clue is in the job title — only “Exec” or “Lux” will do). Nor will they be found eating “al desko” when there’s a new fusion restaurant that’s just received a couple of Michelin stars round the corner from the office.

If you have ever wondered why investment bankers charge such large fees, it’s in part to subsidise their penchant for fine dining. You can’t work for a top investment bank and not know your way around the restaurant scene of every big city, or the programme at the Royal Opera House. And you can’t possibly miss a day’s racing from the Royal Enclosure at Ascot. You won’t find bankers picking up a sandwich meal deal from Marks and Spencer. Unless it’s their own money — in which case they’re as tight as a gnat’s proverbial.

Part of this is, of course, to stop the brain drain from investment banking into private equity or tech. Perks are important to keep your staff: club memberships, paying for meals as long as a client or senior colleague is present, or even coughing up for debentures at favourite football clubs.

Being seen in high-class establishments or at events is important. If you are spotted mingling in all the right circles, clearly you’re going to be considered a mover and shaker. And let’s be honest, you aren’t going to be doing much moving or shaking if you pop into Greggs for a sausage roll — even if you do have the gall to bung it on expenses.

Yet as shareholders challenge fat executive pay packets, money spent on perks is increasingly coming under the spotlight too.

Take Martin Sorrell. In 2015, WPP revealed that the chief executive’s total benefits for the preceding year came to £453,000, including £274,000 in spousal travel expenses; £36,000 towards a car; and £43,000 towards “other expenses”. Add Sir Martin’s £70m pay packet to the mix, and it soon added up to an investor revolt.

You might argue that if you’re the chief of a large and successful company, you’re going to spend a lot of money on travel, hotels, and dining out while attending every social function on the calendar.

Entertaining clients and business prospects is all part of the deal. And if you’re highly profitable, then why not? But if those profits start to fall, greater justification will be required.


In my business career, I had a simple rule. Don’t claim for anything that you cannot justify in front of your most junior member of staff. Or your mum. That said, very often bosses will ask their subordinates to spend so they can sign things off.

On one occasion, I had to carry the company credit card for a three-day corporate event in the South of France that cost half a million quid. Mind you, we made £50m in fees the next year from those invited, so perhaps this was justified. Although I’m not sure that the run to the casino in a range of limos was absolutely necessary. However, the £200 a head dinner for 45 people at the Château Chèvre d’Or was delicious.

Many companies have wised up to general expenses abuse. They ask that you use your own personal card and claim it back later according to a set of guidelines so complex it makes Brexit negotiations look like child’s play. And guess what — these rules seldom apply to the boss. According to a recent survey by Expend, nearly one-third of UK employees have had to ask family or friends for cash because their expenses had to be put on a personal card, with one in five having to wait over a month to be repaid.

Many years ago, I used to arrange dinners to bring together deal makers and senior clients at a glitzy property conference in Cannes. It cost tens of thousands just to have a presence on the Croisette — and even more if you hired a boat to host meetings (the boats never moved away from the quayside and ended up as party venues for junior staff at night, whilst the senior bods retire to their suite in the Carlton).

Which reminds me of a voicemail I received (and saved for months) after I’d presented the costs for a standard-sized boat and for a much bigger one. “Big Boat” was the short reply. So, I booked it. Sipping chilled Veuve whilst chatting on the back of a boat in the warm sunshine is a delight — especially when someone else is footing the bill.

In times of plenty, the larger your expenses account, arguably the further you’ll propel your career. In these enlightened and austere times, it’s exactly the opposite.

At the height of the property boom, one executive I know decided that taking a scheduled flight was just too much. He reckoned by squeezing a few clients and colleagues in, he could justify a private jet from London to Nice, then a helicopter for the short hop from Nice to Cannes. When you see that kind of behaviour it’s time to sell your shares, divest assets and buy gold. The recession is coming. A few years later and those same people are stuck in economy class in a plane so old there’s a rear gunner.

And therein lies the art of expenses. It’s assessing the economic environment. Sometimes it’s wise to keep them to a minimum. Be creative with how you travel, where you stay, where you take clients and how much you spend in order to develop those all-important relationships.

Indeed now, as a freelancer with no company credit card on which to stuff any lavish expenditure, I do exactly what people in business should be doing — treat the money as if it’s my own. If it’s worthwhile, spend. If not, there’s nothing wrong with a bit of austerity. After all, one of the biggest problems for the rich in these tricky economic times is how to stay rich. The simple answer? Don’t spend it in the first place.

James Max is a property expert and radio presenter. The views expressed are personal. Twitter: @thejamesmax. If you have a problem for James, contact him at richpeoplesproblems@ft.com

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