Volunteers' expenses in the spotlight
By The Low Income Tax Reform Group - 11/05/2009
Traditionally the bulk of volunteers are mature people. But now with people being encouraged to volunteer their services more, the Low Income Tax Reform Group (LITRG) have produced a new report which shows how inconsistent the tax and benefits treatment of volunteers’ expenses are - and makes recommendations for a simple and coherent approach across Government departments.
Earlier this month the Prime Minister declared "everyone agrees that volunteering is a very good thing", and spoke of how he envisaged new schemes under which "all young people will undertake some service to their community, and where community service will become a normal part of growing up in Britain".
But do bureaucracy and a lack of coordination across government departments create barriers to people volunteering? Our new report, which analyses the conflicting rules of three Government departments in the volunteering world, suggests that this might be so, because:
• The Department for Work and Pensions (DWP) worry that reimbursements might have to be taken into account for benefits purposes
• HM Revenue and Customs (HMRC) worry that reimbursements could be disguised income, and
• The Department for Business, Enterprise & Regulatory Reform (BERR) worry that reimbursements could be disguised pay to avoid the national minimum wage rules.
We say, surely the time has come for all parts of Government to work together to make life easier for charity and community volunteers - not erect barriers in their path? The Chairman of the LITRG, John Andrews said: “It would be good to move to a position where the volunteer and those who engage them have simple rules which are understandable to all. Volunteers prefer to help rather than to complete paperwork and look over their shoulders in case something is wrong.”
So in our report we make three primary recommendations:
1. To form a working group of key organisations to address the issues with the objective of simplification
2. In the interim, Directgov (the public services website) should co-ordinate the existing information from the various government silos into as close to a coherent whole as is currently possible, and
3. Volunteers should be able to donate their expense reimbursement under Gift Aid to a charity or other qualifying organisation that they are volunteering for, without layers of bureaucracy.
The full report can be accessed at Volunteers' Expenses Report. For more information on the LITRG go to the website linked below.