Charity Expenses Policy: What to Include and How to Claim Trustee Expenses

Charity trustees are unpaid volunteers. That principle is fixed in law and applies to the vast majority of charity boards in England and Wales. But being unpaid does not mean bearing personal costs — trustees can and should claim back genuine out-of-pocket expenses incurred in carrying out their trustee duties.

The Charity Commission is clear on this: claiming reasonable expenses is distinct from being paid for trusteeship, and a properly run charity should have a policy that covers both the process for claiming and the types of expense that are and are not reimbursable. Without a policy, expenses become ad hoc, inconsistent, and occasionally awkward when claims arrive that no one is sure should be paid.

Who should have a charity expenses policy

Any charity where trustees or volunteers travel to meetings, incur costs on the charity's behalf, or might otherwise be out of pocket for legitimate charitable activities should have a written expenses policy.

For small charities, the policy can be short — a single A4 page is sufficient — but it should be formally adopted by the trustees and reviewed annually. It feeds into the trustees' duty to manage resources responsibly, which is one of the six core duties set out in the Charity Commission's CC3 guidance.

What the policy should cover

Who can claim. Typically: trustees, senior staff (where not otherwise covered by a separate HR policy), and volunteers carrying out charity activities. Define this precisely — "all trustees and volunteers authorised by the treasurer" is clearer than "anyone involved with the charity."

What can be claimed. Common claimable expenses include:

• Travel to trustee meetings and charity events (own vehicle mileage, public transport fares, parking)
• Accommodation and meals when travel requires an overnight stay (with a cap per night and per meal)
• Postage and stationery incurred on charity business
• Telephone calls made on charity business (if not already covered by a work phone)
• Caring costs — childcare or carer costs incurred to attend a meeting (a specific inclusion that improves trustee accessibility)

What cannot be claimed. The policy should be equally explicit about costs that are not reimbursable:

• Food and drink not incidental to a specific charity activity
• Costs that have already been reimbursed elsewhere
• Personal costs not directly related to trustee duties
• Costs that would normally be covered by the trustee's employer (e.g., where an employer already pays travel expenses)

Mileage rates. Where trustees use their own vehicles, the policy should specify the reimbursement rate per mile. HMRC publishes approved mileage allowance rates — for the 2026/27 tax year, the approved rate for cars and vans is 55p per mile for the first 10,000 miles in the tax year, and 25p per mile thereafter. Paying at or below these rates avoids any tax or National Insurance liability for the claimant. Charities sometimes pay lower rates to manage costs — this is permitted, but the policy should state the rate clearly.

Note: the mileage rate increased from 45p to 55p per mile from 6 April 2026. If your policy was written before this date, it needs updating to reflect the current approved rate.

The claims process. The policy should specify:

• How claims are submitted (paper form, spreadsheet, email template — whatever works for the charity)
• What documentation is required (receipts for all claims over a set threshold, e.g. £10)
• Who approves claims (usually the treasurer or chair — ideally not the person making the claim)
• How quickly claims are paid (within 30 days of submission is standard)
• What happens if a claim is disputed

Controls. The policy should require that claims are approved by someone other than the claimant, and that claims above a certain value (e.g. £100) require a second signatory. For the treasurer's own claims, approval should rest with the chair or another trustee.

How to set a framework for a small charity

A simple expenses policy for a small charity typically runs to four sections:

1. Purpose and scope. One paragraph explaining what the policy covers and who it applies to.

2. Claimable and non-claimable expenses. A short list of each, keeping the language clear and avoiding the need for trustees to make judgment calls.

3. Mileage rates and daily limits. Specific figures — the per-mile rate for vehicle use, any accommodation cap, any daily meal cap. Being specific avoids ambiguity.

4. Claims process. Who submits, who approves, what evidence is required, and how payment is made.

The policy should be signed off by a trustee vote and noted in the board minutes. Annual review keeps the mileage rate current and adjusts any caps as the charity's costs change. Our guide to trustee meeting best practices covers how to formally adopt and record policy decisions in minutes.

Caring costs

Including caring costs — childcare, carer costs for an elderly dependent — in the reimbursable expenses list is recommended by the Charity Commission as a practical step toward a more inclusive board. Not every trustee can easily attend a 6pm meeting in a town centre without arranging care for dependants, and the cost of that care is a real barrier to participation. Reimbursing it is a governance decision, not a legal requirement, but it aligns with the Charity Governance Code's emphasis on diversity and inclusion.

When expenses should not be paid

The Charity Commission notes that there are situations where paying expenses from charitable funds could be a misuse of those funds — for example, where the expense is not reasonably necessary for carrying out the trustee's duties, or where a trustee is inflating claims beyond genuine costs.

Charities that discover overstated claims should treat them as a serious governance matter and consider whether to involve their independent examiner. The emphasis in the policy on requiring receipts and having a two-person approval process for significant claims is the structural protection against this.

Use our free Governance Code Self-Assessment Tool to check whether your charity's financial controls and trustee practices align with current Charity Commission expectations.

---

This guide covers charity law in England and Wales. Charities in Scotland and Northern Ireland are regulated separately. This is information, not legal or financial advice.

Sources

• Charity Commission CC3: The essential trustee — what you need to know, what you need to do
• GOV.UK: Charity trustee — what's involved (includes trustee expenses)
• HMRC: Mileage Allowance Payments (480: Appendix 3) — approved rates 2026/27