Guidance

Paying trustees: other types of trustee payments

Published 25 April 2025

Applies to England and Wales

Being a trustee is generally a voluntary role. This is what makes the charity sector unique and promotes trust and confidence in charities. As a result, external reaction to paying trustees is often negative.

This guidance is about particular types of payments to trustees. Read this guidance to understand (for the type of payment you are looking to make):

• the risks of paying trustees, for example public criticism
• the rules you must follow including having a power or authority (legal permission)

You must follow the rules even if the arrangement benefits the charity.

If you do not follow the rules, those who received the payment, or all the trustees, may have to repay the charity.

You should understand what it means to ‘pay’ a trustee. It means:

• giving financial rewards – money, salary, fees, and/or
• giving other benefits, such as free use of equipment or property or free access to services that people normally have to pay for

The rules also apply:

• if it is a company belonging to the charity that pays the trustee
• if it is a person or organisation connected to the trustee who is being paid (a ‘connected person’)

You may have to name the trustee or connected person you paid and what you paid them in your charity’s accounts. Your charity’s accounts become public information.

This guidance applies to all charities.

If you are looking to pay a trustee or a connected person for a situation not covered in this guidance, contact us.

Buy or rent land from a trustee or connected person

There are 4 main steps when buying or renting land from a trustee or connected person.

• Step 1: You, as trustees, must consider that it is in the charity’s best interests. You must manage the conflict of interest
• Step 2: You must have a power or authority (legal permission)
• Step 3: Charitable companies should check if extra company law rules apply
• Step 4: Record your decision and make sure you follow the rules on disclosing trustee payments in your charity’s accounts

If you are looking to sell or lease land to a trustee or connected person, read the right guidance.

Step 1: Make the decision

You, as trustees, must consider that it is in the charity’s best interests to buy or rent land from a trustee or connected person. This means it is more advantageous to the charity than:

• not buying or renting land at all, or
• buying or renting land that is not owned by a trustee or a connected person

You must not decide to buy or rent because it benefits the person who owns the land.

You must also be clear that the benefits outweigh the risks. Think about the risks and how you will manage them. For example: 

• the risk that the purchase is, or could be seen to be, motivated by reasons other than the best interests of the charity
• criticism from within or outside your charity. This could become public criticism and could affect your charity and its funding
• not complying with the legal requirements
• trustees disagreeing about whether to go ahead
• general risks with buying or renting land, or the land in question

You must manage the risks. For example, by:

• reading this guidance and making sure you follow the rules
• complying with the rules on trustee decision-making
• getting independent professional advice about the land, the costs and terms
• using a professional, such as a conveyancer
• keeping a full record of why you made your decision
• explaining your decision especially if it is criticised in public
• following the rules on disclosing payments in your charity’s accounts

Manage the conflict of interest

When trustees are paid, they have a conflict of interest each time you make decisions about that payment.  

When buying or renting land, the following trustees will have a conflict of interest:

• the trustee who owns the land
• any trustee who has a connection to, or financial interest in, an organisation that owns the land
• any trustee who has a relationship with the person who (directly or indirectly) owns the land. This includes where they:
  • are financially interdependent. For example, partners who have joint living costs
  • are not financially interdependent. For example, a son or daughter who does not live with the trustee

Other circumstances might mean a trustee has a conflict of interest. If you are not sure, you can get legal advice. If in doubt the safest thing to do would be to treat the trustee as though they have a conflict.

There can be more than one trustee who is conflicted. Make sure you identify them all.

You must manage all conflicts of interest whenever they arise. For example, the first decision to rent and later decisions to extend the agreement to rent. Read our guidance about conflicts of interest to help you.

You must still manage the conflict of interest even if:

• buying or renting the land in question benefits the charity
• you have a power or authority, as explained in step 2

Step 2: Check you have a power or authority

Before you enter into the contract, you must have a power or authority (legal permission) to buy or rent land from a trustee or connected person.

This means carefully checking your charity’s governing document.

In this section, a ‘prohibition’ means any wording or clause in the governing document that indicates trustees or connected persons cannot:

• sell or rent land to the charity or
• receive any type of payment or benefit (or ‘remuneration’) from the charity

‘Former trustee’ means a trustee who:   

• resigned with a view to selling or leasing their land to the charity or
• was involved (when they were a trustee) in the charity’s decisions to buy or rent land

If, after reading this section and checking your governing document, you are not sure, get legal advice.

Buying or renting from a trustee or former trustee

If your charity’s governing document includes a clear power to buy or rent land from a trustee or former trustee, you can use that power.

If it sets out any rules, you must follow them. For example, it might say you must get the Charity Commission’s consent first. This is called a ‘conditional power’.

You will need authority from the Commission if your governing document:

• does not say anything that clearly permits the charity to buy or rent land from a trustee or former trustee, or
• contains a prohibition

Buying or renting from a connected person

i. Your governing document contains a power

If your charity’s governing document provides a clear power to buy or rent land from a connected person, you can use that power.

Make sure you:

• check that the power covers the relationship between the trustee and the person or organisation you are buying or renting from. For example, if that is a trustee’s company, the power must clearly permit the charity to buy or rent land from companies that belong to trustees. If it does not, read ii below
• follow any rules set by the power. For example, it might say you must get Charity Commission consent first. This is called a ‘conditional power’

ii. Your governing document does not contain a power

Read this section if your governing document:

• does not say anything at all about buying or renting land from a connected person, or
• does not contain a power that you can use. For example, it contains a power that only covers trustees’ spouses and you are looking to buy or rent from someone else connected to a trustee

You will need Commission authority if you are buying or renting from:

• a company or organisation that a trustee has a financial interest in, or from which a trustee may receive a financial benefit as a result of the transaction
• an individual who is financially interdependent with the trustee. For example, they share living costs

If they are not financially interdependent, or they will not receive a financial benefit, you do not need authority as long as you can manage the conflict of interest.

iii. Your governing document contains a prohibition

You will need Commission authority when:

• the prohibition covers the relationship between the trustee and the person or organisation you are looking to buy or rent from, or
• the prohibition does not cover the relationship, but you are buying or renting from:
  • a company or organisation that a trustee has a financial interest in, or from which a trustee may receive a financial benefit as a result of the transaction, or
  • a person who is financially interdependent with the trustee

If they are not financially interdependent, or they will not receive a financial benefit, you do not need authority as long as you can manage the conflict of interest.

Apply for Charity Commission authority

If you need Commission authority, you will need to tell us the following:

• who you are buying or renting from
• whether they are a trustee, former trustee or a connected person
• where they are a connected person, who are they connected to and how they are connected
• a description of the land
• whether you got professional advice, such as from a designated advisor
• why buying or renting the land or property is in the charity’s best interests
• the purchase or rental price, how you decided on it, and how this and other terms are in the charity’s best interests
• what other options you considered and why you discounted them
• where buying, confirm that the trustee or connected person will not continue to hold control over the land after your purchase. If they will, why and how this is in the charity’s best interests
• the risks and how you will manage them
• how you managed the conflict of interest
• whether other trustees at your charity are paid; what they are paid; and what proportion of your charity’s trustees are currently paid
• that you made the decision in line with your governing document rules. For example, that the meeting was quorate
• whether your governing document contains a prohibition or conditional power

Apply for authority.

If you need authority because you cannot manage the conflict of interest, you will need to:

• provide the information listed above about how you made the decision and how it is in the charity’s best interests
• tell us if you have a governing document power
• tell us why you cannot manage the conflict

Make one application if you need authority to buy or rent land and to manage a conflict of interest.

Step 3: Charitable companies 

Only read this section if your charity is a charitable company. Other charities, read step 4.

There are company law rules that apply to companies that transact with directors and people or organisations connected to them. Where a company is a charity, the directors are the trustees. So, check if these rules apply to what your charity is looking to do. Get legal advice if you need it.

Here are examples of what to check:

• the definition of who is a ‘connected person’ is different under company law. Check if this means you need to follow extra rules
• if your members must give their approval to the charity (or its subsidiary) buying or renting land from a trustee or connected person because the transaction meets the definition of a ‘substantial non cash asset’

Where your members must give their approval, you will need Charity Commission authority under section 201 of the Charities Act 2011. If you need this, get Commission authority first; then your members’ approval. 

If you decide to consult your members first, their resolution must state that their approval is subject to getting section 201 authority from the Commission.

If you need section 201 authority, you will need to explain:

• why you need that authority; which company law requirements apply
• why the arrangement is in the charity’s best interests.

Apply for section 201 authority.

Step 4

For all charities, read guidance about:

• recording your decision to pay a trustee or connected person
• disclosing trustee payments in your charity’s accounts

Pay a trustee for work already carried out for your charity

In exceptional circumstances a charity can apply to the Charity Commission for authority where:

• a trustee has carried out work for the charity, and
• the charity wishes to pay or has paid the trustee for the work, and
• the charity does not have the power to pay the trustee

If the Commission gave authority, this would allow the trustee:

• to be paid for the work that they have carried out, or
• to keep payment that they have already received

The Commission can only give authority if it decides that it would be unfair or inequitable for the trustee not to be paid for the work they have completed. 

Check your governing document before you apply for authority. We will usually only consider an application where there is no other authority for the payment. For example, we would not normally consider an application if:

• a charity’s governing document permits the payment, or
• the statutory power to pay a trustee for providing goods or services to the charity could be used

Who can apply for authority

The charity or the trustee who completed the work can apply for authority.

The trustee can be:

• a current trustee
• a former trustee, but they must have been a trustee when they carried out the work

What you can apply for

You can only apply for work that a trustee has already completed.

If your charity wants the trustee to continue the work, and to pay the trustee for that work, you will need to either (before the trustee does further work):

• use the statutory power mentioned above or
• get Commission authority

What the Charity Commission must take into account

We must take into account several factors when making our decision. These include whether authorising payment for work already carried out, because the charity did not have the right power, would encourage trustees to breach their trustee duties.

We will therefore consider a range of information and evidence from you, including:

• the work that was carried out, and why it was needed
• how you decided that the trustee should carry out the work
• how you decided the payment rate
• whether the trustee who carried out the work accepts the breach of duty
• why you did not get authority before the trustee carried out the work
• how the charity will make sure this situation does not happen again, such as having a policy or extra training about trustee payments

Apply for Charity Commission authority

If you are making an application, you will need to provide the following information:

• your name and role
• the name of the trustee who did the work
• a description of the work: why it was needed, and whether – had the trustee not carried it out – the charity would have paid someone else to do it
• confirmation that the work was over and above the trustee’s usual trustee duties
• evidence that the trustee carried out the work (such as their invoice) and confirmation from the other trustees that the trustee did carry out the work
• the skill needed to carry out the work and confirmation that the trustee had that skill, such as relevant qualifications or experience
• how much you paid the trustee or wish to pay them
• how you decided on this amount and why you consider this is reasonable. For example, by reference to an hourly or day rate or quotes you obtained for the same work from someone who is not a trustee
• whether you managed the conflict of interest in deciding to pay the trustee
• whether the charity’s governing document prohibits the payment
• confirmation that the charity does not have a power in its governing document to pay the trustee
• why you could not use the statutory power
• why you did not get authority before the trustee carried out the work
• whether the trustee accepts liability for breach of duty
• what steps the charity has taken to avoid the same situation happening again
• why it would be unfair or inequitable for the trustee not to be paid or not to retain a payment
• whether the trustee or the charity has applied for this type of payment before and the outcome
• whether all the trustees support the application. We would not usually consider an application if the other trustees did not support it. We would usually want a copy of the trustee resolution, or minutes of the relevant meeting, with your application.

You will also need to confirm that the information you have provided is accurate. You should be aware that it is an offence under section 60 of the Charities Act 2011 to knowingly or recklessly provide false or misleading information.

To apply, email: equitableallowance@charitycommission.gov.uk  

Read the Commission’s privacy notice: Personal information charter.

Small payments or honorariums

This section is about making small payments or honorariums using the charity’s funds. For example:

• to a retiring trustee to thank them for their service to the charity
• to a trustee for carrying out a role such as clerk

You must consider that it is in the charity’s best interests to make such payments. Consider the risks. For example, that using the charity’s funds to make these payments may not be popular with your beneficiaries, members or supporters.

You do not usually need authority from the Charity Commission if your payment is ‘small’. This means:

• for non company charities, an individual payment of £1000 or less or
• for company charities, an individual payment of £200 or less and
• where total payments to all trustees at the charity - company or non company - during the financial year will not exceed £1000. (This does not include trustee expenses)

If your charity is a company, and you wish to give a payment or benefit to a trustee in connection to their retirement of more than £200 (or to someone connected to them), you must:

• get Charity Commission authority under section 201 of the Charities Act
• then under company law get your members to give their approval

If you ask your members to approve it first, their resolution must state this is subject to getting section 201 authority from the Charity Commission.

Apply for section 201 authority.

Record your decisions

For all types of trustee payments, keep a full record of your decisions and the reasons for them. For example, in the minutes of the relevant meeting. This can help show you followed the rules.

Keep a record of any Charity Commission authority you received.

Disclose trustee payments in your charity’s accounts

Charities that prepare accrual accounts

Your charity’s accounts must give certain details about payments and other benefits to trustees and connected persons. Check the Charities’ SORP or seek professional advice.

SORP explains the accounting rules for charities that prepare accrual accounts.

Charities that prepare receipt and payments accounts

You should include details of payments you made to trustees and connected persons. For example, who you paid, why you paid them, what you paid them, and the power or authority for the payment.

Check what type of accounts your charity must prepare.