Reimbursement of Expenses and Sales of Goods

Middleton Railway Trust Ltd. (MRT) Policy Directive

Reference: FIN/5 (11/14)

Subject: Reimbursement of Expenses and Sales of Goods. For the attention of: All Council Members.

This Directive does not form part of the Safety Management System.

Previous versions of this Directive were as follows. Reference 4/89/1 was the initial version.

Reference 11/14/1 replaced it, to recognise the distinction between railway expenses and personal expenses, and to cover sales of goods.

This version implemented the revised numbering scheme for directives, but made no other changes to the content.

This Directive contains the following sections: Introduction

Railway Expenses Personal Expenses Sales of Goods

This Directive defines the conditions under which the MRT is prepared to reimburse expenses that may be incurred by members of the MRT in the course of business carried out on behalf of the MRT. It has been made to take account of the changes in the MRT’s business practices since these conditions were first defined. Its scope has also been extended to cover sales of items by members on behalf of the MRT.

For the purposes of this Directive there are two forms of expenses that may be incurred, as follows:
- Railway Expenses, which are expenses that are incurred when a member buys any items that are specifically for use by the MRT and where the MRT does not have an account with the company from whom these items are being bought, so that at the time of the purchase the only acceptable form of payment is directly by the member concerned.
- Personal Expenses, which are expenses that are incurred by an individual member for buying any goods or services which they then use themselves in the course of carrying out the business of the MRT: for example the costs of travel, accommodation, postage, telephone etc..

This Directive will be due for review at intervals of ten years, but may be reviewed after a shorter period of time if changes in business practices make this necessary.

All purchases that are to be made on behalf of the MRT must be approved in advance by the person appointed by the Council to hold the budget against which that purchase is to be charged.

Where a purchase has been approved by the relevant budget holder, the expenses incurred for it can be reimbursed by the Treasurer on receipt of a completed expenses claim form and the supporting invoices and receipts. Reimbursement will not be made unless supporting invoices or receipts are provided.

Policy Directive FIN/4 (11/14) continued

In the event that the member making a purchase has not obtained approval for it from the relevant budget holder, for whatever reason, the expenses incurred for it will only be reimbursed with the subsequent approval of Council. Members of the Council should not give any members making such purchases any grounds for assuming that such approval will automatically be given.

On any purchase where VAT may be incurred, the member making the purchase must ensure that they obtain VAT invoices and receipts, and that where possible these invoices and receipts should be in the name of the MRT, so as to enable the MRT to recover the VAT incurred from Her Majesty’s Revenue and Customs (HMRC from now on).

In the event that a budget holder is requested to approve any purchase that is outside the scope of their budget as this was agreed at the start of the MRT’s financial year, or the budget holder themself wishes to make such a purchase, then that budget holder must seek approval from the Council for that purchase before it is made.

Where practical a member must seek Council’s approval in principle and in advance for any expenses that they are going to incur on behalf of the MRT. In giving such approval the Council will identify the budget against which the expenses are to be charged.

In the event that it is not practical, for whatever reason, for a member incurring such expenses to obtain approval for them in advance, the expenses incurred for it will only be reimbursed with the subsequent approval of Council. Members of the Council should not give any members incurring such expenses any grounds for assuming that such approval will automatically be given.

Approved expenses will normally be reimbursed on receipt of a completed expenses claim form together with the necessary invoices and receipts. For items such as telephone costs, where it may not be practical to produce such supporting documentation, the basis on which the expenses will be reimbursed must be approved in advance by the Treasurer. Otherwise, reimbursement will not be made unless supporting invoices or receipts are provided.

In considering and approving the likely amounts of expenses, the following guidelines will be adopted.
1. For travel by public transport, fares incurred will be reimbursed, but where there is a choice of fare available it is expected that the times of travel and other factors will, as far as possible, be chosen so as to enable the cheapest fare to be utilised.
1. For travel by private car the cost of fuel will be reimbursed, provided that this cost does not exceed the rate per mile that is authorised by HMRC for the payment by employers on a tax-exempt basis of mileage expenses for the use of private cars. The Council will accept estimates of expense based on normal fuel consumptions and cost.
1. For hotel or similar accommodation the cost of accommodation and subsistence will be reimbursed, but not the costs of drinks or other items of hospitality.
1. Where costs appear to be unreasonably high the Council may only approve the reimbursement of what it regards as a reasonable part of them.

For items that are normally sold through the shop, the treasurer will issue instructions to shop staff to ensure that VAT on such sales is correctly recorded, so as to enable the MRT to account correctly for it to HMRC.

Members may not purchase items from the shop on credit. By arrangement with the shop staff they may deposit cash in the shop in their name and may then spend some of it, provided that they do not overspend.

In any situation where a member acts on behalf of MRT to sell any items other than ones which are normally sold through the shop, the sale of those items must be approved in advance by the treasurer, in consultation with the holder of the budget to which that sale will contribute income. Such sales must be restricted to items that are no longer of practical use to the MRT, unless they are specifically approved by Council.

For any such sale, the member making the sale must comply with any directions issued by the treasurer in respect of the supporting documentation that must be obtained, so as to ensure compliance with any relevant requirements, such as environmental ones. In particular, since it is likely that any such sale will give rise to a liability to VAT which must then be paid to HMRC, appropriate VAT documentation must be issued and must be in the name of the MRT, so as to enable the MRT to account correctly for it to HMRC.

Drafted by A Roberts (Treasurer) and A J Cowling (Company Secretary) and approved on 25th November 2014.