Resources / Can charity trustees be paid? Expenses, payments and the rules (CC11)
Can charity trustees be paid? Expenses, payments and the rules (CC11)
The general rule is that trustees serve unpaid. Repaying a trustee's expenses is always fine. Paying a trustee is possible, but only in defined circumstances and with the right authority. The rules for England and Wales are in the Commission's guidance CC11, and getting them wrong can mean the trustee has to repay the charity.
What expenses can trustees claim?
Expenses repay a trustee for costs of doing the role. They are not income, they are not taxable, and the Commission does not count them as a trustee payment. You do not need anyone's permission to pay them. The Commission's list of claimable costs includes:
- travel to meetings, including petrol, parking and public transport
- overnight accommodation, and food and drink when a trustee has to stay away
- the trustee-business share of phone and internet costs
- a carer or childminder so the trustee can attend
- costs that let a disabled trustee do the role, translation, or a British Sign Language interpreter
- training that helps the trustee do the job, for example safeguarding training
Costs must be reasonable and really incurred, so ask for receipts. Making up a trustee's lost earnings is different: the Commission treats that as a trustee payment, and the rules below apply. Our free trustee expenses policy template gives you a policy to adopt.
Can a trustee be paid for providing goods or services?
Often yes, without asking the Commission. The Charities Act 2011 gives charities a statutory power to pay a trustee, or someone connected to them, for goods or services beyond normal trustee duties. For example, a trustee who is a plumber fixing the hall, or a trustee's firm printing the newsletter. The law sets conditions, and you must meet them all:
- your governing document must not forbid paying trustees
- getting the goods or service from this trustee must be in the charity's best interests
- the amount must be reasonable for what you are getting
- there must be a written agreement before the goods or service arrive (a minute is not enough, and you must keep the agreement for 6 years)
- only a minority of trustees may be paid or benefit at any one time
- the conflicted trustee must take no part in the discussion or the decision
When you use the power you must also take the Commission's guidance in CC11 into account. "Connected" is defined in the Act and covers close family and businesses a trustee controls. If you cannot meet a condition, you need the Commission's authority before you pay.
Can a trustee be paid for being a trustee?
Rarely, and only with specific authority. The statutory power above does not cover payment for trustee duties themselves, such as chairing meetings or making decisions. To pay for the role you need a clear power in your governing document, or authority from the Commission. The Commission expects a strong case that payment is in the charity's best interests, and usually treats it as temporary. An unpaid board is part of why the public trusts charities, so expect scrutiny. Pay without authority and the trustee may have to give the money back.
Can we employ a trustee, or someone connected to them?
Only with authority. The statutory power does not cover employment, so employing a trustee, a close family member or their business needs a power in your governing document or the Commission's consent. The conflict rules still apply: the trustee involved stays out of every discussion about the job, the pay and the person's performance. Many charities ask the trustee to resign from the board before they apply for a staff role, which is often the cleaner answer.
What must we record and disclose?
- Declare the conflict. The trustee says so at the start and withdraws. Our guide to conflicts of interest covers how.
- Minute the decision. Record what you decided, why it is in the charity's best interests, and who withdrew. The Commission says a full record is how you show you followed the rules.
- Keep the paperwork. The written agreement is part of your financial records. Keep it for 6 years, with any Commission authority.
- Disclose in the accounts. Charities preparing accrual accounts must disclose trustee payments and benefits under the Charities SORP. Receipts and payments accounts should include the details too.
What does this mean for a small charity?
Unpaid does not mean out of pocket. Trustees who quietly cover their own petrol and printing are subsidising the charity, and it narrows who can afford to serve. The Commission encourages paying expenses because it helps you recruit and keep trustees. Adopt a short expenses policy and pay claims quickly. And when a trustee offers the charity a fair deal on real work, use the statutory power properly: the conditions above take one agenda item to meet. If you are new to the role, start with what a charity trustee does.