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Payment of volunteer expenses for a small charity

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I'm the treasurer of a small community-based charity and have been asked if we can pay a dedicated volunteer (who is already in paid part-time employment eslewhere) some sort of amount of daily expenses in recognition of their hard work for the charity.  I should welcome any advice on the tax implications of this question, and specifically whether there are limits on the amounts of such daily payments.

Many thanks in advance.

 

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By Accountant A
22nd May 2020 14:46

sjp123 wrote:

pay a dedicated volunteer (who is already in paid part-time employment eslewhere) some sort of amount of daily expenses in recognition of their hard work for the charity. 

Are you remumerating them or reimbursing expenses that they incur while volunteering?

Anyway. Type "payment of volunteer expenses" into Google and get reading.

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Replying to Accountant A:
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By sjp123
24th May 2020 17:59

Many thanks for your - I'll follow your advice !

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By paul.benny
22nd May 2020 15:55

You should take a look at whether your charity's constitution has anything to say on the matter - although it may be silent.

Reimbursement of genuine out of pocket expenses against receipts is usually fine, although you should agree with the volunteer what you will and won't pay for.

Be cautious about other payments. A round sum honorarium *may* be fine but anything related to the days worked starts to look similar to wages . You don't want to end up establishing an employment relationship.

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Replying to paul.benny:
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By sjp123
24th May 2020 18:03

Many thanks Paul. The potential of setting up an employment relationship is precisely my concern and why I asked the question in the first instance. And you were quite correct about our constitution being silent on this issue - but we do have a separate expenses policy.

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By memyself-eye
22nd May 2020 18:58

No you cannot - you are looking to reward a volunteer for more than their out of pocket expenses - mileage being the usual one - stop trying to disguise 'pay' as something else.

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Replying to memyself-eye:
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By sjp123
24th May 2020 18:04

Ouch - fairly short and to the point !!

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RLI
By lionofludesch
22nd May 2020 20:15

There's not enough information.

What are these expenses ?

Is it just a few quid that you don't want to tax or is the volunteer genuinely out of pocket?

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Replying to lionofludesch:
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By sjp123
24th May 2020 18:06

Sorry for the lack of information. Other replies have given me the necessary answer.

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By Wanderer
22nd May 2020 21:26

sjp123 wrote:

some sort of amount of daily expenses in recognition of their hard work for the charity.  I should welcome any advice on the tax implications of this question, and specifically whether there are limits on the amounts of such daily payments.

If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a payment of wages.
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Replying to Wanderer:
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By sjp123
24th May 2020 18:07

Many thanks for your humorous reply !!

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