What is an honorarium?
An honorarium is a voluntary fee for voluntary service, a usually small sum of money given to someone as a token of esteem for some work they’ve done. It’s another name for a gift, fee, or some form of payment for services rendered.
An honorarium is an ex gratia payment, i.e., a payment made, without the giver recognizing himself as having any liability or legal obligation to the recipient for his volunteered services, or for services for which fees are not traditionally required
So it's free money?
Well no. The person receiving the money should consider how to record this on any personal tax rules.
If it is over £2500pa then they will need to declare this in a Self Assessment Tax return.
If not, they can telephone 0300 200 3300 to have their record updated.
You need to remember that this is (usually) the charities money and therefore a record of it will appear in the accounts.
If Trustees or other volunteers are giving regular payments on behalf of the charity to volunteers or in exchange of other services from their own funds, this is actually a donation to the charity that isn’t going through the accounts. That’s not good practice.
But we can give our money away right?
Any charity wanting to give honorarium should have clear reasons for giving the money, both who to and why. So – ‘we give xxx to anyone who does xxx to defray their travel costs and time’ is fine, but changing the rules as to who gets what depending on demands or preferences is less so.
This should appear in the financial policy as well, along with any limitations such as:
- up to xx times per year
- honoriums are given only where the board has minuted this.
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Wendrie Heywood
MBS Founder
