Charity trustees can claim reasonable out-of-pocket expenses they’ve paid while doing charity work. This is a proper use of charity funds if done with the right checks. This can help:
- ensure trustees aren’t left out of pocket.
- encourage people to get involved who otherwise couldn’t afford to.
These payments are not taxable and don’t affect benefits if they only cover actual costs.
Examples of legitimate expenses include the following.
- Travel to meetings (e.g. bus fares, mileage)
- Meals while on charity business
- Overnight stays for charity work
- Childcare or care for dependants during meetings
- Postage, phone costs, or translation services
- Training materials or publications
- Adjustments for trustees with disabilities (e.g. specialist transport)
Examples of non-legitimate expenses are below.
- Costs for spouses or partners
- Private phone bills or medical insurance
- Excessive or luxury expenses (e.g. expensive hotels)
- Expenses already covered by another organisation
If your charity is considering the payment of expenses, it is advisable to first:
- check the governing document allows expenses.
- create a written expenses policy that covers:
- Who can claim
- What can be claimed
- Claim process and timeframes
- Payment methods (e.g. BACS, not cash)
- Required documentation (e.g. receipts)
- Approval levels and record keeping
- Insurance requirements (e.g. car use)
- How often the policy is reviewed
Share the policy with all trustees and make sure it’s understood.
Remember, you must also report expenses in the trustees’ annual report. Misuse or excessive claims can damage the charity’s reputation, and false or unreasonable claims may lead to action by the Commission. Trustees may also have to repay any improper expenses.
This is an overview only. For more information, see section 3 of the Guidance on trustee expenses and payments.