Paying expenses to volunteers is common practice for many organisations. For others however, expense payments are apparently out of scope due to funding restrictions. Some organisations, even major nationals, pay expenses but risk falling foul of legislation. This is a brief guide to best practice in paying volunteers expenses.

Key Points

• Only reimburse volunteers for expenses actually incurred in the course of their volunteering.
• If you can't afford volunteer expenses now, cost them into future funding applications, or consider applying for a small grant specifically to cover expenses. See Volunteer Centre Edinburgh's factsheet Funding Volunteer Programmes
• Ensure adequate record keeping of expense payments. This is evidence for funders, and it covers your volunteers' backs in the case of Benefits Agency or Tax enquiries.

Why Pay Expenses?

In order to include people on low incomes. Paying expenses can also be a way of increasing a volunteer's sense of being a part of the organisation. And if a volunteer doesn't want to accept the expense payments, get them to claim their expenses and donate them back to the organisation. It is well worth setting up a system for this that keeps the process simple.

What Should we Pay?

The mantra for this factsheet is only reimburse actual expenses. If you give volunteers extra cash, or set amounts that don't reflect actual costs, you are seriously at risk of falling foul of minimum wage legislation. This also puts volunteers' benefits at risk and can leave them liable for taxation.

Reasonable expenses include:

• Travel to and from the place of volunteering
• Travel in the course of volunteering
• Childcare
• Food and refreshments while volunteering
• Postage, telephone calls etc. paid for by volunteer
• Cost of equipment, protective clothing etc.
• Attendance at training events and courses
• Travel

Environmental considerations: Out of kindness to the environment many organisations encourage their volunteers to use public transport, their legs, or a bicycle to get to their voluntary work. For them car use is absolutely the last option, unless it is for safety reasons (getting home in the dark), for reasons of disability, distance, or lack of availability of alternative transport. If you are funded by the City of Edinburgh Council, you should have an environmental policy that encourages staff and volunteers to use environmentally positive means of transport.

Walkers: At present there is no tax free mileage rate on shoe leather, so you shouldn't pay people expenses for walking to work.

Cyclists: We recommend paying volunteers who cycle to their voluntary work the 20p a mile tax free mileage rate.

Public Transport Users: Travel by train and bus to the place of work, or in the course of voluntary work, should be remunerated wherever possible. Organisers on limited budgets may want to impose limits on the extent of these payments. For example, an Edinburgh organisation that engaged a Glasgow volunteer, paid the volunteer for their transport within City of Edinburgh boundaries, but not the full fare from Glasgow.

People with Disabilities: We recommend paying for taxis for people with disabilities. Volunteers using taxis should not be expected to use their Taxi Card in order to get to/in the course of their voluntary work.

Mileage Rates: Tax free mileage rates 2005 - 2006 (pence/mile):

	first 10,000 miles in tax year	> 10,000 miles in tax year
Cars / Vans: Regardless of engine size	40	25
Motorcycles	24	24
Bicycles	20	20

Food

It is reasonable to reimburse volunteers for the cost of meals / refreshments they have while doing their voluntary work. The amount should be the actual cost of their meal; though it is common practice to set an upper limit. Many organisations choose only to offer meals to volunteers who are doing four hours or more voluntary work at any one time.

Childcare

Childcare can be an expensive business. But it is increasingly recognised by funders (see our factsheet Funding Volunteer Programmes) and volunteer organisers as something worth paying for: Melanie Nairn, of the Edinburgh Rape Crisis Centre, puts it like this:

The provision of childcare was completely necessary for me to be an unpaid worker. When working with women especially, it is essential to have some kind of childcare provision for volunteers.....we find that what works best for us and our volunteers is to provide childcare expenses. This allows workers to choose the childcare that suits them and their children best. If we were not able to provide those expenses it would be virtually impossible to recruit women as our volunteers.

Not paying expenses for childcare can clearly constitute a barrier to volunteering for anyone with young children. If paying cash and letting the volunteers arrange their own provision proves impossibly expensive, consider sharing creche facilities with other organisations, or pairing up volunteers with childcare responsibilities. If you are still unable to provide any childcare now think about introducing it in the future.

Note of Warning

Paying a `flat rate', or over the odds for a volunteer's expenses could leave them liable to taxation. Similarly, it could jeopardise a volunteer's welfare benefits. Asylum seekers are also affected, with strict Home Office guidelines warning that anything beyond remuneration for actual expenses will be construed as payment for (illegal) work.

Recent cases have found that flat rates can constitute a wage - a wage which is below the level of the minimum wage. In this situation the organisation would be liable to pay the volunteer for all the time worked, up to the level of the minimum wage.

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See also:

When does a volunteer become an employee?

Funding Volunteer Programmes

[Updated April 2003]