49. Can we give our volunteers a flat rate expenses payment? We are finding it time-consuming and difficult to pay out exact expenses against receipts. It’s an administrative nightmare.

It may seem easier to pay volunteers a flat rate, rather than reimbursing actual receipted expenses, but by doing this you are putting both yourselves and the volunteer at risk. Volunteers on benefits may lose part of their benefit if they receive anything over and above what they have actually spent. So, for instance, if your flat rate is £5 a day, but they have only spent £3.50, the extra £1.50 will be seen as a payment and could affect their benefits. The Inland Revenue also views money over and above actual out-of-pocket expenses as taxable income.

You may also find that if you pay a flat rate you are inadvertently creating a contract of employment, because the volunteers may be seen as working in return for a sum that exceeds their actual expenses - no matter by how little. By creating a contract you could make them an employee, which means that they could be entitled to full employment rights including the National Minimum Wage. (If you're interested in knowing more about volunteers and contracts, you can contact the Information Team at Volunteering England.)

It is therefore quite important that you take receipts and keep records so that you can prove, if necessary, that any money you have paid out is an actual reimbursement. It may seem like unnecessary work to collect receipts and pay exact amounts but it is important in order to protect both the organisation and its volunteers.