Trustee expenses: what charities can pay
Guidance about trustee expenses, including what costs can be paid as expenses and what should be in a trustee expenses policy.
Applies to England and Wales
Your charity can pay trustee expenses: most commonly the costs that trustees reasonably incur to perform that role. For example, costs to travel to trustee meetings.
They can also cover costs that a trustee has met on behalf of the charity, such as any purchases they have made for the charity or payment of a charity invoice. It is for individual trustees to decide whether to pay these types of costs on behalf of the charity.
Expenses should be reasonable; they should not be excessive and they should be properly incurred.
You do not need Charity Commission approval to pay trustee expenses.
Check whether your charity pays expenses and think about whether you should encourage trustees at your charity to claim the expenses they are entitled to.
Paying expenses can help your charity attract and keep trustees because it means individuals do not lose out financially for taking on that role. This may help individuals who may be discouraged from acting as a trustee because of the costs that acting as a trustee may bring.
Expenses are not taxable income and should not affect any state benefits trustees receive.
Expenses are not trustee benefits.
What expenses charities can and cannot pay
These are the types of costs that a trustee may incur to carry out their trustee role and which can be considered an expense:
- reasonable travel costs, including petrol, parking and congestion charges, public transport, or taxi fares
- reasonable costs of overnight accommodation
- reasonable costs of food and drink
- telephone and internet subscriptions, and other communications costs but only for the proportion of time used for trustee business
- translation of documents into Braille or into different languages
- booking a British Sign Language interpreter
- reasonable costs that enable a person with disabilities to carry out their trustee role
- reasonable costs for a carer or childminder
- reasonable costs of training materials
These are examples of what charities cannot pay:
- costs that are unrelated to charity business, such as those incurred on personal business or personal engagements
- travel or accommodation costs for spouses, partners or family members who are not travelling on charity business
- excessive costs, for example on travel or accommodation
- telephone or other communication costs for business unrelated to the charity
- private medical insurance
- school and boarding fees for dependants
You should ask for appropriate evidence, such as receipts, as proof that the trustee met the cost they are claiming, except where this is impractical. For example, where very small amounts are claimed.
If trustee expenses are excessive, unreasonable or false, a trustee may have to pay them back.
Claiming expenses
Your charity should have a policy that sets out:
- what trustees can claim, and how
- what evidence is needed to support a claim
- that trustees should declare that the claim is accurate and was properly incurred
- when trustees need permission before they incur a cost
- how claims are approved
- that a trustee cannot approve their own claim
- how quickly expenses will be paid once a claim is made
Make sure that claims comply with your trustee expenses policy.
Read guidance about having proper controls at your charity to protect its funds.
Paying expenses directly
Your charity can pay directly for the cost of, for example, trustee travel. This means trustees do not become out of pocket and avoids the need to process claims.
You can also pay trustees in advance to cover their expenses. However, this has risks. For example, the risk that the payment is more than a trustee needs to cover their expenses. In this situation, trustees must repay the unspent amount unless you agree that they can keep it for their next trustee expense.
If you pay trustees in advance, review the level of payments to make sure they reflect as closely as possible expected costs.
Disclosing expenses in your charity’s accounts
In this section, ‘trustee expenses’ means the costs trustees incur to perform their trustee role. For example, to travel to trustee meetings. Other examples are listed in the guidance above.
Charities that prepare accrual accounts must:
- give details of trustee expenses that you have paid, or
- confirm you have not paid any trustee expenses
Find out more in the Charities SORP or seek professional advice.
If your charity prepares receipts and payments accounts, you should provide the same information.
Check what type of accounts your charity must prepare.