Expenses Policy Template

This template provides an outline on how an organisation should reimburse employees for work-related expenses.  It covers the following: principles, allowable expenses, claiming expenses, child and dependent care, entertaining external parties and the payment process.

  1. Introduction

This policy sets out the basis on which the  (organisation’s)Trustee expenses will be paid, and the process for claiming.

(organisation’s) Memorandum allows the payment of expenses incurred by Trustees on (organisation) business: reasonable and proper out of pocket expenses of Trustees.

(organisation)  does not expect Trustees to be out of pocket in respect to work carried out for the charity and encourages all Trustees to submit claims for reasonable expenses incurred whilst carrying out their duties as a trustee of (organisation).

     2. Principles

The Charity Commission has issued guidance on the payment of expenses to charity trustees.  This is reproduced at Annex 1.  Claims for, and payment of, expenses must be consistent with the following principles:

  1. Expenses are refunds by a charity of payments which the Trustee has needed to meet personally in order to carry out his or her Trustee duties.  They are not payments for services.  
  2. Expenditure should be made by the most cost effective means available. Transport by train should be second class.  Air flights should be made with the most cost effective airline.  Meeting dates are normally notified 12 months in advance.  Wherever possible therefore travel should be booked sufficiently in advance to take advantage of the better value tickets available. Where this is not possible, a brief note of the reasons for extra expenses incurred should be attached to the claim form.
  3. The expenses incurred must not be of a standard or nature which would constitute a personal benefit to the Trustee eg. elaborate meals, first class rail travel, business class air travel, because under charity law a trustee is not permitted to benefit personally from being a Trustee, (other than through the membership benefits available to all members of (organisation) ).
  4. Evidence must be provided that the expenditure has been incurred.  Please note that our auditors require that every expense claim is fully supported up with tickets and receipts.  These should be attached to travel claim forms.
  5. Expenses are not allowable for the costs of partners who attend an (organisation)  event with a Trustee.

3. Allowable expenses

The following are legitimate expenses;

  1. the reasonable cost of travelling to and from Trustee Board and Committee meetings, and on trustee business (including where taxi fares were necessarily incurred, and petrol allowances permitted by the HMRC before tax becomes payable);
  2. the reasonable costs of childcare or dependent care, provided that it is agreed in advance, and in circumstances where a trustee would otherwise be caused hardship or would be prevented from participating in a Trustee Board meeting or other essential activity (please see section on child and dependent care below);
  3. the cost of postage and telephone calls on charity business;
  4. communication support: translating documents into Braille for a blind trustee, or into different languages; provision of alerting and listening devices, and other special aids for people with hearing impairment.  (organisation)  will provide communication support appropriate to their role for Trustees who request it.  Please discuss your needs with the Head of  Corporate Governance and Planning who will make the arrangements for you.
  5. providing special transport, equipment or facilities for a trustee with a disability; and
  6. reasonable overnight accommodation and subsistence while attending trustee meetings or other essential events (eg specialist or voluntary sector conferences).

4. Process for claiming expenses

All expense claims in respect to attendance at (organisation’s)  Trustee Board meetings and events should be submitted on a Trustee expense claim form (yellow) and sent to the Head of  Corporate Governance and Planning (contact details below) together with receipts for all costs.   Details of expenditure should be itemised (i.e. Travel and accommodation given separately) with the date for each.  Forms are available at board meetings or from the Head of Corporate Governance and Planning. If in exceptional circumstances a receipt is not available, please ensure that you provide a signed note with an explanation and attach this to your claim form.

Expense claims should be made at regular intervals, and preferably every 3 months.  All expenses for the current financial year should be claimed before 31 March in that year.

5. Child and dependent care

In order to allow for variable rates in child and dependent care costs, a rate of payment and the period for which care costs will be payable, must be agreed in advance between the Trustee and the Head of Corporate Governance and Planning.  Agreed costs will be paid to the Trustee upon presentation of an invoice or receipts.  (organisation)  will not normally pay for 24 hour care, and will not make payment to a Trustee’s partner, spouse or other “Connected Person” within the meaning of charity law.  Within this framework of reasonable costs agreed in advance with (organisation) , the choice or carer, and responsibility for that choice lies with the Trustee.  

6. Entertaining external parties

There may be occasional circumstances where costs will be incurred in entertaining external contacts on (organisation’s)  business, such as a lunch meeting with funders or trustees from other charities which we are currently or looking to work with.  However:

(a) Entertaining expenditure must be agreed in advance by (organisation) (please contact the Head of Corporate Governance and Planning)

(b) Costs incurred in entertaining external contacts will only be reimbursed by (organisation)  provided that the occasion is clearly one which benefits (organisation)  and not the Trustee.

(c) A separate form will need to be completed for these expenses, reference “S5 Entertainment claim form” (obtainable from the Head of Corporate Governance and Planning).  Please note that HMRC requires that entertaining claims must detail all attendees (names and organisation) at the meeting as well as the reason for entertaining.   

7. Payment of expenses

(organisation)  prefers Trustees to have expenses paid directly into their bank accounts.  Please contact the Head of Corporate Governance and Planning with a note of your account number and sorting code, and this will be set up for you.  The advantage of this method of payment is that it can be arranged within a few days of receiving your claim and will save you having to visit the bank to deposit a cheque in your account.

8. Address for Trustee expenses claims

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Annex 1 – Charity Commission guidance on Trustee expenses (extract from Charity Commission Leaflet CC11 – Payment of Charity Trustees, May 2004)

Expenses

  1. Expenses are not payments in return for services. There can often be confusion over this.
  2. Expenses are refunds by a charity of payments which a trustee has needed to meet personally (or which have been met on his or her behalf) in order to carry out trustee duties. Even in the absence of any specific authority in the governing document, the law clearly entitles a trustee to reimbursement of expenses that have been properly incurred.
  3. As a general rule, claims for expenses should be supported by bills or receipts from third parties, except where it is unreasonable to expect this (eg where small amounts are claimed). Any costs that are reasonably necessary to allow trustees to carry out their duties can be classed as expenses, and repaid to them or met directly by the charity.
  4. The following are examples of legitimate expenses:
  • the reasonable cost of travelling to and from trustee meetings, and on trustee business (including taxi fares where necessarily incurred, and petrol allowances permitted by the Inland Revenue before tax becomes payable);
  • the reasonable cost of childcare whilst attending trustee meetings;
  • the cost of postage and telephone calls on charity business;
  • communication support: translating documents into Braille for a blind trustee, or into different languages; provision of alerting and listening devices, and other special aids for people with hearing impairment;
  • providing special transport, equipment or facilities for a trustee with a disability; and
  • reasonable overnight accommodation and subsistence while attending trustee meetings or other essential events (eg specialist or voluntary sector conferences).
  1. The following are examples of items which are not legitimate expenses, but rather trustee payments requiring explicit authority:
  • loss of earnings whilst carrying out trustee business;
  • allowances, eg financial loss allowance;
  • honoraria (small or token sums not intended to reflect the true value of the service provided);
  • payment for specialist skills and services.
  1. The following are examples of payments which are neither legitimate trustee expenses, nor are they payments which could be authorised out of a charity’s funds:
  • payment of hotel accommodation or travel costs for partners who are not themselves travelling on charity business;
  • payment of private telephone bills or other private expenses incurred on business unrelated to the charity.
  1. If a payment is not allowed for by an express power in the governing document, and the trustees are in doubt over whether it is a legitimate expense, they should contact us for advice, as our authority may be needed.

Annex 2 – Guidance on claims for subsistence

The detailed guidance below is intended to help Trustees to make judgments about what expenses may be claimed for subsistence (meals).  It is very difficult to produce guidance which covers every eventuality and the following aims to set out an approach which seems reasonable.  This guidance will be updated regularly.

(organisation)  will reimburse Trustees for the costs of simple meals bought while undertaking a long journey (2 hours or more) to attend a Trustee Board, Sub Committee meeting or otherwise on (organisation)  business.

In normal circumstances NDCS will reimburse Trustees for the costs of food up to £6 for breakfast, £7 for lunch and and £15 for a main meal.  (organisation)  will not pay for the cost of alcoholic drinks.  

However if a journey is subject to long delay, or, for instance, someone has to wait for a lengthy period at a station or airport where there is a limited choice of meals, (organisation)  will look sympathetically at a claim to cover reasonable costs above the normal limits.

Click here to download the template.