EIM71125 - Voluntary office holders: meaning of ‘reasonable’

From April 2020, where a voluntary office holder is paid or reimbursed reasonable expenses incurred in relation to carrying out the duties of their office there is no charge to tax on the payment or reimbursement. This change legislates for the previous concessionary practice under which the payment or reimbursement was not charged to tax.

For the exemption to apply the expenses that are paid or reimbursed must be reasonable and incurred directly as a result of the office holders carrying out the duties of their office.

What constitutes ‘reasonable’ will always depend on the facts of the case, but the payment or reimbursement should be fair and sensible and do no more than meet the actual expenditure incurred by the voluntary office holder.

Often organisations that use voluntary office holders have an expenses policy and guidance in place, confirming the levels and types of expenses that they will reimburse.

The expectation is that only fair, sensible and proper private expenditure incurred by volunteers in carrying out the duties of their office will be reimbursed by an organisation.