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Tax treatment of payments to volunteers

This area has caused
difficulties for some voluntary organisations in the past. The role of the
volunteer and of volunteering in voluntary organisations has changed and
continues to change. The multiple benefits of volunteering, the extended role
for volunteers including tasks which can be complex and require training, the
increasing extension of good practice of reimbursing expenses to volunteers, in
some cases even stretching to child and dependent relative care cost, coupled
with the formalisation of some volunteering with contracts, has resulted in some
charities finding themselves in difficulties with their local PAYE inspector.


In some instances, the status of the volunteer has been questioned. Such
challenges have seldom resulted in extra revenue for the Exchequer as generally,
after an expensive and complex investigation, voluntary organisations have been
able to evidence that volunteers are not employees.

Some guidance from
the Inland Revenue would assist in this area, possibly in the form of an
extra-statutory concession. This could confirm that the reimbursement of
expenses to volunteers is not within the scope of PAYE or Schedule E. One-off
ex-gratia payments of up to say £100 for lengthy or exceptional service could be
excluded from the remit of PAYE for volunteers where there is no other payment
made. The provision of necessary training for volunteering, no matter how costly
or useful to the volunteer, should not change their status from volunteer to
employee. The same guidance could cover all of these related issues.