Volunteers and voluntary workers

Produced by Tolley

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Volunteers and voluntary workers
  • Tax and national insurance
  • Unpaid officeholders and expenses
  • Volunteers’ expenses and gift aid
  • National minimum wage
  • Interns

Volunteers and voluntary workers

Tax and national insurance

If a volunteer or voluntary worker receives no payment or benefits at all in connection with the voluntary work, the question of tax and national insurance obviously does not arise.

If the volunteer incurs expenses in carrying out the voluntary work, and is either paid in advance or reimbursed for those expenses (and nothing more), the expenses or reimbursements are not taxable or subject to NIC. Similarly, if the organisation for which the volunteer works makes reasonable payments to cover expenses which the volunteer would not otherwise have incurred, such as the cost of travelling from home to the place where the voluntary work is done, there is no tax or NIC due.

Organisations using volunteers may want to use HMRC’s scale rates to cover volunteer’s travel and subsistence costs, as these are accepted by HMRC as being ‘reasonable’ and should not of themselves trigger any argument from HMRC that there is a liability to tax. See the Excessive levels of expenses guidance note for more on the using HMRC’s scale rates.

However, if the organisation pays or provides more than described above, then there may be difficulties both from the perspective of tax and NIC and also in connection with the national minimum wage (NMW) / national living wage (NLW) legislation (see below).

In order for tax and NIC on employment income to come into the picture, there needs to be two elements present:

  1. the individual needs to hold an office or employment

  2. the payments or benefits received must arise from that office or employment ― usually as reward for services rendered

If a person holds an office with the organisation in question and receives anything other than reasonable reimbursement of expenses, any such payments or benefits are likely to be seen as employment income with tax and NIC applied on that basis (but see below regarding HMRC’s view on trivial amounts paid to unpaid officeholders).

If a non-officeholder volunteers to carry out

Popular documents