Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to coronavirus home-working tax relief, for what reason volunteers for charitable organisations that are office holders are treated differently from those volunteers who are not.

Neither volunteers nor voluntary office holders pay tax on out-of-pocket expenses reimbursed by the organisation, providing the amount reimbursed is no more than the additional expenditure incurred. This includes expenses for additional household costs if they have had to work at home, including if they have had to work at home because of Coronavirus. Tax will be due on any allowances received which exceed expenditure.

Neither voluntary office holders nor volunteers can claim tax relief from HMRC for additional costs related to their volunteering as they have no earnings against which the relief could be set.

Following a legislative change in April 2020, voluntary office holders are classed as employees to ensure that no liability to Income Tax arises in respect of a payment to a person who holds a voluntary office, if the payment is in respect of reasonable expenses incurred when carrying out the duties of that office. This change ensured the tax treatment of their private expenses, such as travel between home and the place the work is done, is comparable to those of volunteers.

Employers can reimburse employees, including voluntary office holders, for homeworking expenses under Section 316A of ITEPA03 which allows exempt payments to be made in a wider set of circumstances, including where there is a voluntary homeworking scheme. However, where volunteers must work at home because of Coronavirus, it is advisable for the volunteer organisation to determine the appropriate rates of reimbursement, ensuring such payments do not give rise to a profit.