If you operate a charity or regularly rely on the services of volunteers, you may be confused about whether or not volunteers can claim expenses and how to manage this process.
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The UK government and the National Council for Voluntary Organisations (NCVO) have published some guidelines highlighting the rights of volunteers, including the possibility of reimbursement for out-of-pocket expenses. However, there is no prescription for how those expenses must be paid and very few recommendations pertaining to the actual items that can be claimed. It’s up to the individual organisation to make these decisions, and to create a volunteer expenses policy which manages the involvement and contribution of volunteers in a fair and structured way. A policy also ensures that everyone within the organisation, from Board Members to staff, understands and demonstrates the value that volunteers bring to the organisation. In this guide we put together all you need to know about creating a successful volunteers expenses policy.
Which Expenses Can Volunteers Claim?
Volunteers aren’t paid for their time, but they may still be entitled to some money to reimburse them for their expenses, usually limited to food, drink and travel (or specific out-of-pocket expenses they need to purchase during their duties). Note that any other payments, promises of a contract or paid work in the future, or rewards or benefits may lead to volunteers being classed as workers or employees; organisations should be mindful of how they approach the subject. Essentially, no volunteers should be left out of pocket.
Expenses that volunteers may claim for can include:
Travel costs from home to work.
Food and drink.
Postage and telephone costs.
Protective clothing that may need to be purchased to fulfil their duties.
The cost of education or training, if needed.
Expenses incurred for the care of dependants while volunteering.
As the operator of a charity or volunteer programme, it’s important to make it clear from the outset, which expenses can be claimed and how they can be claimed. Expenses claimed should be supported by receipts or cost estimates. Volunteers that are paid a round-sum allowance should also keep receipts to prove that the sum they were paid was used for relevant expenses. Any expenses paid that exceed the actual expenses incurred may be treated as taxable employment income.
Click here to download our free Expense Management for Charity Volunteers guide.
Volunteer Expenses Policy: What is it and What Should be Included in a Policy?
Volunteers do not have contracts of employment to refer to, nor do they have the same rights automatically afforded to employees. While a volunteer expense policy isn’t compulsory, it helps set expectations between volunteers and the organisation they are representing without constituting a contract.
A volunteer expenses policy should detail exactly which expenses volunteers can claim back from the organisation, how they should make a claim, how claims will be paid and how the process is handled.
A volunteer expenses policy should include:
A statement detailing the purpose and scope of the policy.
A statement detailing expectations and compliance with the policy.
Volunteer responsibility regarding receipts.
How to handle lost or missing receipts.
Compensation for travel, accommodation, private vehicle usage and mileage, other forms of travel (including public transport).
Whether or not expenses such as car parking charges, penalties, fines and accidents can be claimed for.
How to claim for these expenses.
The relevant timescales for the submission and reimbursement of expense claims.
Estimating the actual travel cost of using own transport is difficult, because it doesn’t just take fuel into account, but also wear and tear on the vehicle. Volunteer expenses policies should always include agreed mileage rates that can be paid without incurring tax liability. Extra payments can also be made if you carry other volunteers in your vehicle travelling to the same site or workplace, usually up to 5p per passenger per mile. Records should be kept to justify expense claims.
Someone within the organisation should be assigned to monitor the implementation of the policy. It should be made available to everyone, especially during the recruitment of volunteers, e.g. by posting it on your website. Make sure to review your policy annually and make revisions if and when there are any changes.
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Advantages of Introducing a Volunteers' Expenses Policy
A volunteer expenses policy defines (for both volunteers and the organisation) how volunteers should be treated and what they can expect. It’s often the key to attracting and involving a diverse range of volunteers.
A volunteer expenses policy:
Avoids any unpleasant disputes or ambiguity about expenses that may arise during the volunteer programme.
Demonstrates that the organisation values their volunteers and their volunteer programme.
Ensures fairness and consistency.
Sets a written standard that ensures decisions aren’t made on an ad hoc basis.
Offers security to volunteers as there are written guidelines to refer to if they feel that there is a reason to dispute or make claims.
Avoids frivolous or unwarranted expenses or financial abuse.
With a solid volunteer expenses policy in place, it becomes much easier to compensate volunteers and manage their expectations.
Of course, an expense management system is the key to realising these benefits. If you have an effective expense management system like ExpenseIn in place, you can create, approve and even report on volunteer expenses using a single easy-to-use system. Volunteers can scan receipts on the go, in-field, while the organisation can check and approve expenses in mere minutes. Implementing a good expense management system makes it easier for both volunteers and the organisation to receive and pay expenses. A straightforward system can also avoid the time wasted supporting volunteers with simple claims and queries.
Compensating your volunteers and keeping track of volunteer expenses shouldn’t be a burden or a barrier to the important work your organisation does.
For more guidance on charity accounting, use our comprehensive guide to charity reporting and annual accounts.
