In order for there to be any tax considerations related to work you do, normally there have to be earnings from that work.
If you do voluntary work for a voluntary organisation – for example, a charity or local society – you will not normally be paid. If you are not paid, it follows that the work you do cannot, of itself, give rise to a tax liability.
However, if you are located overseas when you are performing that unpaid work, your physical presence there may mean that you become ‘tax resident’ in that country. This will depend on the tax rules in that country.
It is often the case that you are either tax resident or not for an entire tax year. Coupled with this, most countries tax their tax residents on worldwide income. As such there could be some unforeseen consequences of your volunteering abroad: for example, income you earn before or after the stint of unpaid volunteering (but in the same tax year) may be taxable in that country.
You will therefore need to consider whether there are tax issues arising in the country in which you are volunteering and what impact this may have on your home country tax position. However, see our example Mary for an understanding of how double tax agreements can help in these types of situations.
For more information about the tax consequences of volunteering in the UK, visit our ‘volunteering and training’ section.
There is information available about a special reduced rate of ‘voluntary’ National Insurance contributions (NIC) available to volunteers in developing countries to help protet your UK contribution record for certain benefit purposes where necessary. Please note that the intention is that this special reduced rate will be removed as of 6 April 2019 as part of the reform of Class 2 and Class 4 NIC.
For information on the UK tax treatment of expense payments or accommodation, meals and so on that can be provided to volunteers, see our report on the main LITRG website.