Supporting volunteers: HMRC compliant expenses and recognition tips for charities

Volunteers are the backbone of the UK charity sector, contributing time, skills and energy to support vital causes. From fundraising and governance to service delivery and community outreach, their contributions are invaluable. As we approach International Volunteer Day on 5 December, it’s a timely opportunity for charities to reflect on how they support and recognise their volunteers—while staying compliant with HMRC rules on volunteer expenses and recognition.

This guide outlines what charities need to know about reimbursing volunteer expenses HMRC-compliantly and recognising contributions without creating tax or employment liabilities.

Reimbursing volunteer expenses: What is allowed?

Volunteering should never leave someone out of pocket. HMRC allows charities to reimburse genuine out-of-pocket expenses incurred by volunteers, including:

• Travel costs (e.g. public transport, mileage, parking)
• Meals and refreshments during volunteering
• Childcare or dependent care while volunteering
• Protective clothing or equipment required for the role
• Phone calls, postage, or stationery used for charity work

To remain compliant:

• Reimburse actual costs only—not flat rates or round sums.
• Request receipts or records (e.g. travel logs)
• Avoid overpaying, as this could be seen as income and become taxable
• Reimburse promptly and clearly explain your expense policy during volunteer onboarding

Charities should also ensure that expense policies are accessible, transparent and regularly reviewed. Volunteers should feel confident in submitting claims and understand what is covered.

Recognising volunteers without tax implications

It’s natural to want to thank volunteers for their time and dedication. However, rewards must be handled carefully to avoid unintentionally creating an employment relationship or triggering tax liabilities.

What you can do:

• Say thank you with a handwritten card, email or public recognition
• Host a volunteer appreciation event (e.g. a lunch, tea or celebration)
• Offer small, low-value gifts (e.g. a mug, flowers or badge) occasionally, ensuring they are not regular or expected
• Provide training or development opportunities that support the volunteer role

What to avoid:

• Cash payments, vouchers or stipends – these may be treated as taxable income
• Regular or high-value gifts, which could imply employment
• Promises of future paid work, which may change the volunteer’s legal status

If you do wish to give a gift, ensure it is modest, one-off and clearly a token of appreciation, not a reward for services. When in doubt, seek advice from your accountant or HMRC.

Volunteer status and legal considerations

Volunteers are not employees and it’s important to maintain that distinction. Offering financial incentives or setting formal obligations can blur the lines and lead to unintended legal consequences.

To protect both your charity and your volunteers:

• Avoid setting contractual obligations or performance targets
• Ensure volunteer agreements are non-binding and clearly state the voluntary nature of the role
• Provide clear role descriptions and expectations without implying employment terms

Building a positive volunteer experience

Supporting volunteers goes beyond compliance. It’s about creating a culture of respect, inclusion and appreciation. Consider:

• Regular check-ins to understand volunteer needs and feedback
• Opportunities for skill development or progression within the organisation
• Celebrating milestones such as years of service or achievements

A well-supported volunteer is more likely to stay engaged, advocate for your cause and contribute meaningfully over time.

Writing clear volunteer policies

Having well-documented policies is essential for ensuring consistency, transparency and legal compliance in your volunteer programme. A good policy helps volunteers understand their rights and responsibilities and protects your charity from unintended risks.

When drafting or reviewing your volunteer policies, consider including:

• Purpose and scope: Explain the role of volunteers in your organisation and what the policy covers
• Expense reimbursement: Outline what expenses are eligible, how to claim them and what documentation is required
• Recognition and rewards: Clarify how your charity shows appreciation, including what is and isn’t appropriate under HMRC rules
• Volunteer status: Reinforce that volunteers are not employees and that roles are unpaid and voluntary
• Safeguarding and conduct: Include expectations around behaviour, confidentiality and safeguarding responsibilities
• Training and support: Detail any induction, training or supervision provided
• Review and updates: State how often the policy will be reviewed and who is responsible for maintaining it

Policies should be written in plain language, made easily accessible to volunteers and reviewed regularly to reflect changes in legislation or organisational practice.

Final thoughts

Volunteers give their time freely and it’s essential they feel supported and appreciated. By reimbursing expenses properly, recognising contributions thoughtfully and maintaining clear boundaries, your charity can foster a positive volunteer experience—without risking tax or legal complications.

If you’d like help reviewing your volunteer policies or ensuring compliance with HMRC guidance, we’re here to support you.