Policy templates / Trustee Expenses & Payments Policy
Charity Trustee Expenses & Payments Policy Template (Free, UK)
Filled in from your workspace when you adopt it in CharityControl. A starting point to adapt, not legal advice.
1. Purpose and who this covers
This policy explains how your charity handles money that trustees spend on our behalf, and the strict limits on any money we pay to trustees. It protects both the charity and individual trustees by making sure every payment is proper, authorised and recorded.
This template is a starting point to adapt for your charity, not legal advice. Before you pay or reimburse any trustee, check what your own governing document says and take advice if you are unsure.
It applies to everyone on our board, including co-opted committee members and any non-trustee advisers who attend our meetings. It also applies to people or businesses connected to a trustee, for example a trustee's spouse or partner, a close relative, or a company they control.
2. Our starting point: trustees are volunteers
Being a trustee of your charity is a voluntary, unpaid role. Trustees give their time for free and must not receive any payment or personal benefit from the charity unless it is specifically allowed by law or by our governing document.
There is one important thing that is not treated as a payment or benefit: repaying a trustee for reasonable costs they have had to pay out of their own pocket to carry out the role. Reimbursing genuine expenses is proper and expected. No one should be unable to serve because they cannot afford the costs.
3. Expenses we will reimburse
We will repay reasonable costs a trustee has to pay personally to do their trustee work, including:
- travel to and from meetings, training and charity events (see our rates below);
- overnight accommodation and reasonable meals when charity business means staying away from home;
- the cost of care that allows a trustee to attend, for example childcare or replacement care for a dependant;
- the reasonable cost of meeting an access or communication need, such as a sign-language interpreter or large-print papers;
- postage, printing, phone and data costs directly related to charity work.
Costs must be reasonable and actually incurred. If you are unsure whether something will be covered, agree it with the treasurer before you spend.
4. Expenses we will not reimburse
We will not repay:
- personal spending, or the personal part of a mixed personal-and-charity trip;
- fines or penalties, including parking and speeding tickets;
- alcohol, unless the board has agreed it forms part of an approved event;
- costs a trustee chose to incur that were not needed for the role, or that go beyond what is reasonable;
- anything with no evidence of the amount actually spent.
We do not pay round-sum or flat-rate allowances. Every claim must be for a real cost the trustee actually paid.
5. The rates we use
Where a trustee uses their own car, we reimburse mileage at the HMRC approved mileage rate. As a current benchmark this is 45p per mile for the first 10,000 business miles in a tax year and 25p per mile after that; confirm the current rate on gov.uk5. Paying at or below the HMRC rate keeps the reimbursement free of tax and National Insurance, so we do not pay more than that rate.
For rail and other public transport we reimburse standard-class fares. We reimburse the actual cost of overnight accommodation up to a reasonable local rate; agree anything above the ordinary rate with the treasurer before you book.
6. How to claim and how claims are approved
To claim, complete our expense claim form within 30 days of the spend and attach receipts or tickets showing what you actually paid. A card statement on its own is not enough.
Claims are checked and approved by the treasurer. The treasurer's own claims are approved by the chair, and the chair's by another trustee. No trustee approves their own expenses. Approved claims are paid by bank transfer within 30 days.
7. Conflicts of interest
Any decision about a payment or benefit to a trustee, or to someone connected to them, is a conflict of interest and is handled under our Conflicts of Interest Policy. In short, the trustee concerned takes no part in that decision. Our Conflicts of Interest Policy owns the full procedure for declaring the interest, standing back from the discussion and vote, and keeping enough unconflicted trustees in the room to make the decision properly.
8. Paying a trustee for goods or services
Occasionally the charity may want to pay a trustee, or a business connected to a trustee, to provide goods or a service that goes beyond ordinary trustee duties, for example catering an event or giving professional advice. The law allows this only in limited circumstances and on strict conditions2. Before agreeing any such payment we will:
- check our governing document does not forbid it;
- put the arrangement in a written agreement that sets out the work and the maximum amount;
- satisfy ourselves the amount is reasonable and that using this trustee is in the charity's best interests;
- make sure the trustees who could be paid this way stay a minority of the board;
- manage the conflict of interest under our Conflicts of Interest Policy.
Getting this wrong is easy. Say a trustee who runs a catering business is paid to provide the food at our AGM. That can be perfectly proper, but only if we first checked the governing document allowed it, put the work and price in writing, tested the price against other quotes, and recorded that the conflicted trustee took no part in the decision. If we just let them invoice us because it was convenient, the payment has no legal authority behind it, whatever the food was like.
Employing a trustee, or someone connected to a trustee, as a worker needs these same checks, must be on terms no better than we would offer anyone else, and may need the Charity Commission's authority first1.
We do not pay any trustee simply for being a trustee, or for the ordinary work of the role, unless our governing document or the Charity Commission expressly allows it.
9. Keeping records and reporting in our accounts
We keep every approved claim, receipt and service agreement for at least six years7. Our annual accounts must state the total expenses repaid to trustees, and any amounts paid to trustees or connected people for goods or services, together with the number of trustees involved6. If no trustee received any expenses or payment during the year, the accounts must say so.
The failure this prevents is a quiet, undisclosed payment. Say a trustee's partner is paid a small monthly sum to run our social media on an informal handshake. Even a modest, well-meant arrangement like this is a payment to a connected person. It needs the authority checks in section 8, and it must be disclosed in the accounts as a related-party transaction. Leaving it out because it felt too small to mention is exactly what the disclosure rule exists to catch.
10. Reviewing this policy
The board reviews this policy at least every two years, and sooner if the law or our governing document changes. The treasurer is responsible for bringing it back for review by your review date.
More about this policy
When you need it
Every charity in England and Wales is under a legal duty not to pay or benefit its trustees except where the law or its governing document allows it, and to disclose any trustee payments and expenses in its accounts[1]. A written expenses and payments policy is not itself named in law, but it is how trustees show they are meeting those duties. The Charity Commission expects one, and an independent examiner or auditor will look for it.
If your charity ever reimburses a trustee, pays one for a service, or simply wants the option, you need this policy. Even a wholly volunteer board that pays nothing should have it, so that the "nil" position is a deliberate, recorded decision rather than an accident.
This template is a starting point to adapt, not legal advice. Check your own governing document and take advice before you pay or reimburse any trustee.
What it protects against5 examples
A trustee who runs a plumbing firm does repair work on the charity's hall and invoices for it. No one checked whether the governing document allows paying a trustee, and the trustee stayed in the room while the board agreed to pay the bill.
The reader checks the governing document (or Charities Act power) actually allows the payment, records the conflict, has the trustee leave the room while the others decide, and discloses it as a related-party transaction in the year-end accounts.
The chair claims a round-sum £100 a month as 'expenses' with no receipts, plus home broadband and lunches. Over a year it mounts up and the independent examiner queries it.
Only genuine costs the person actually paid, each backed by a receipt. No round-sum allowances, no household or personal costs.
The treasurer reimburses their own train fares and mileage straight from the bank account, approving their own claims, and hands some cash to another trustee with no record.
Nobody approves their own claim, and every payment goes by bank transfer with a paper trail, not cash.
A trustee claims first-class rail, a taxi that could have been a bus, and 200 miles of mileage for a meeting that could have run on video.
Reasonable and necessary costs only: standard-class travel, the cheapest sensible option, and a set mileage rate agreed in advance.
A trustee's partner is quietly paid to run the charity's social media on an informal arrangement the other trustees never saw the detail of, and it never appears in the accounts.
Payments to a trustee's partner, family or company are decided by the other trustees, logged in a register, and disclosed in the accounts as a related-party payment.
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How to enforce it
Practical steps to make it live, not just filed:
- Set who signs off whom, and write it in the policy: the treasurer approves trustees' claims, the chair approves the treasurer's, and no one ever approves their own.
- Use one simple claim form, attach receipts, and submit within three months. Pay every claim by bank transfer, never cash, so each payment has a trail.
- Agree the rules up front: the HMRC mileage rate (45p a mile), standard-class travel, and a short list of what you can and cannot claim. Then there is nothing to argue about on each claim.
- Keep a register of any payment to a trustee or a connected person (a partner, or their company). Check it before year-end so the accounts show related-party payments and the independent examiner is not surprised.
- Put expense totals in the finance report the whole board sees, so claims are visible to all trustees and not just held on the treasurer's desk.
What larger charities add5
Pull one in only when it matches something you actually do:
- Budget and approval limits Mid-size (£1m to £10m)+
- Employing a trustee or a connected person Mid-size (£1m to £10m)+
- Advances, direct booking and charity payment cards Mid-size (£1m to £10m)+
- Delegated authority and independent assurance Large (£10m+)+
- Overseas travel and other higher-cost arrangements Large (£10m+)+
What people get wrong
- Copying a large charity's expenses policy (per diems, corporate card rules, delegated-authority schemes, class-of-travel standards) onto a small volunteer board that will never operate any of it.. Use only the small-band clauses (sections 1 to 10). They meet the full legal duty. Add the mid and large sections only when your charity actually runs a budget, employs people or delegates authority.
- Writing a policy that only covers reimbursing expenses and stays silent on paying trustees for services and on disclosing payments in the accounts, so it quietly fails the legal duty.. Keep sections 8 and 9. The rule that you cannot pay a trustee for a service without meeting the Charities Act 2011 conditions<sup class="fn">[2]</sup>, and the duty to disclose trustee payments and expenses in your accounts<sup class="fn">[6]</sup>, apply to charities of every size.
- The chair claiming a round-sum '£100 a month for expenses' with no receipts, or the treasurer signing off their own train fares and mileage. Both are trustee self-approval and both are unevidenced round-sum payments.. We do not pay round-sum allowances; every claim is for a real cost backed by evidence (sections 4 and 5). No trustee approves their own expenses, so the chair's claims go to the treasurer and the treasurer's to the chair (section 6).
- Treating reimbursed expenses as if they were a payment or benefit that needs special authority, or assuming a trustee can be paid for work just because it helps the charity.. Genuine out-of-pocket expenses are not a benefit and need no special authority (section 2). Paying for a service is a benefit and is allowed only under the written-agreement conditions in section 8.
- Leaving trustee payments out of the accounts, or omitting them because there were none.. State the totals each year, and where nothing was paid, say so explicitly. The statement 'no trustee received any remuneration or expenses' is required, not optional (section 9).
Terms used here2
- conflict of interest
- Anything that could stop a trustee acting only in the charity's best interests, or could reasonably look as if it might.
- related-party transaction
- A dealing between the charity and a trustee, or someone connected to one, that must be disclosed in the accounts.
Sources8
Numbered to match the [n] citations in the template.
- Charity Commission CC11: charities paying a trustee or a connected person, understand the rules Commission guidance
- Charities Act 2011, section 185: remuneration of trustees providing goods or services to a charity legal duty
- Charity Commission CC29: identifying and managing conflicts of interest in a charity Commission guidance
- Charity Commission CC3: the essential trustee, what you need to know and do Commission guidance
- HMRC: travel, mileage and fuel rates and allowances (approved mileage rates) Commission guidance
- Charities SORP (FRS 102): disclosure of trustee remuneration, expenses and related-party transactions in the accounts legal duty
- Charities Act 2011, section 132: preservation of a charity's accounting records for at least six years legal duty
- Charity Governance Code: integrity and decision-making principles good practice