diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index 1b19f950391e..8b5e6af8cfa1 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -10824,6 +10824,10 @@ function isWorkspaceEligibleForReportChange(newPolicy: OnyxEntry<Policy>, report
         return false;
     }
 
+    if (!newPolicy?.isPolicyExpenseChatEnabled) {
+        return false;
+    }
+
     // We can only move the iou report to the workspace if the manager is the payer of the new policy
     if (isIOUReport(report)) {
         return isPaidGroupPolicyPolicyUtils(newPolicy) && isWorkspacePayer(managerLogin ?? '', newPolicy);
diff --git a/tests/unit/PolicyUtilsTest.ts b/tests/unit/PolicyUtilsTest.ts
index 65e2018c7033..1bae25b5819d 100644
--- a/tests/unit/PolicyUtilsTest.ts
+++ b/tests/unit/PolicyUtilsTest.ts
@@ -650,6 +650,7 @@ describe('PolicyUtils', () => {
 
             const newPolicy = {
                 ...createRandomPolicy(1, CONST.POLICY.TYPE.PERSONAL),
+                isPolicyExpenseChatEnabled: true,
                 employeeList: {
                     [currentUserLogin]: {email: currentUserLogin, role: CONST.POLICY.ROLE.USER},
                 },
@@ -675,6 +676,7 @@ describe('PolicyUtils', () => {
             const newPolicy = {
                 ...createRandomPolicy(1, CONST.POLICY.TYPE.TEAM),
                 reimbursementChoice: CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_MANUAL,
+                isPolicyExpenseChatEnabled: true,
                 employeeList: {
                     [currentUserLogin]: {email: currentUserLogin, role: CONST.POLICY.ROLE.ADMIN},
                 },
@@ -696,6 +698,7 @@ describe('PolicyUtils', () => {
         it('returns false if the manager is not the payer of the new policy', async () => {
             const newPolicy = {
                 ...createRandomPolicy(1, CONST.POLICY.TYPE.TEAM),
+                isPolicyExpenseChatEnabled: true,
                 role: CONST.POLICY.ROLE.ADMIN,
                 employeeList: {
                     [approverEmail]: {email: approverEmail, role: CONST.POLICY.ROLE.USER},
@@ -714,6 +717,32 @@ describe('PolicyUtils', () => {
             const result = isWorkspaceEligibleForReportChange(newPolicy, report, policies);
             expect(result).toBe(false);
         });
+
+        it('returns false if policies are not policyExpenseChatEnabled', async () => {
+            const currentUserLogin = employeeEmail;
+            const currentUserAccountID = employeeAccountID;
+
+            const newPolicy = {
+                ...createRandomPolicy(1, CONST.POLICY.TYPE.TEAM),
+                reimbursementChoice: CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_MANUAL,
+                isPolicyExpenseChatEnabled: false,
+                employeeList: {
+                    [currentUserLogin]: {email: currentUserLogin, role: CONST.POLICY.ROLE.ADMIN},
+                },
+            };
+            const policies = {[`${ONYXKEYS.COLLECTION.POLICY}${newPolicy.id}`]: newPolicy};
+            await Onyx.set(`${ONYXKEYS.COLLECTION.POLICY}${newPolicy.id}`, newPolicy);
+            const report = {
+                ...createRandomReport(0),
+                type: CONST.REPORT.TYPE.IOU,
+                stateNum: CONST.REPORT.STATE_NUM.SUBMITTED,
+                ownerAccountID: approverAccountID,
+                managerID: currentUserAccountID,
+            };
+
+            const result = isWorkspaceEligibleForReportChange(newPolicy, report, policies);
+            expect(result).toBe(false);
+        });
     });
 
     describe('isUserInvitedToWorkspace', () => {
diff --git a/tests/unit/ReportSecondaryActionUtilsTest.ts b/tests/unit/ReportSecondaryActionUtilsTest.ts
index bb20293592e9..a4c63010fe40 100644
--- a/tests/unit/ReportSecondaryActionUtilsTest.ts
+++ b/tests/unit/ReportSecondaryActionUtilsTest.ts
@@ -480,6 +480,7 @@ describe('getSecondaryAction', () => {
             id: POLICY_ID,
             type: CONST.POLICY.TYPE.TEAM,
             reimbursementChoice: CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_MANUAL,
+            isPolicyExpenseChatEnabled: true,
             employeeList: {
                 [EMPLOYEE_EMAIL]: {email: EMPLOYEE_EMAIL, role: CONST.POLICY.ROLE.ADMIN},
                 [MANAGER_EMAIL]: {email: MANAGER_EMAIL, role: CONST.POLICY.ROLE.USER},
@@ -513,6 +514,7 @@ describe('getSecondaryAction', () => {
             id: POLICY_ID,
             type: CONST.POLICY.TYPE.TEAM,
             role: CONST.POLICY.ROLE.ADMIN,
+            isPolicyExpenseChatEnabled: true,
             employeeList: {
                 [ADMIN_EMAIL]: {email: ADMIN_EMAIL, role: CONST.POLICY.ROLE.ADMIN},
                 [EMPLOYEE_EMAIL]: {email: EMPLOYEE_EMAIL, role: CONST.POLICY.ROLE.USER},
@@ -542,6 +544,7 @@ describe('getSecondaryAction', () => {
         const newPolicy = {
             id: POLICY_ID,
             type: CONST.POLICY.TYPE.TEAM,
+            isPolicyExpenseChatEnabled: true,
             employeeList: {
                 [MANAGER_EMAIL]: {email: MANAGER_EMAIL, role: CONST.POLICY.ROLE.USER},
                 [EMPLOYEE_EMAIL]: {email: EMPLOYEE_EMAIL, role: CONST.POLICY.ROLE.USER},
@@ -611,6 +614,7 @@ describe('getSecondaryAction', () => {
             id: POLICY_ID,
             type: CONST.POLICY.TYPE.TEAM,
             approver: APPROVER_EMAIL,
+            isPolicyExpenseChatEnabled: true,
             employeeList: {
                 [APPROVER_EMAIL]: {email: APPROVER_EMAIL, role: CONST.POLICY.ROLE.USER},
                 [EMPLOYEE_EMAIL]: {email: EMPLOYEE_EMAIL, role: CONST.POLICY.ROLE.USER},
@@ -652,6 +656,7 @@ describe('getSecondaryAction', () => {
             id: POLICY_ID,
             type: CONST.POLICY.TYPE.TEAM,
             role: CONST.POLICY.ROLE.ADMIN,
+            isPolicyExpenseChatEnabled: true,
             employeeList: {
                 [ADMIN_EMAIL]: {email: ADMIN_EMAIL, role: CONST.POLICY.ROLE.ADMIN},
                 [EMPLOYEE_EMAIL]: {login: EMPLOYEE_EMAIL, role: CONST.POLICY.ROLE.USER},