Training for Parishes 9.00 amEmployment Responsibilities

Andrew Monroe Community Accounting Plus10.45 amCoffee11.00 amGift Aid Small Donations Scheme

Andrew Kayley HMRC12.30 pmLunch 1.30 pmFees and PCCs

David Meredith Director of Finance S&NDBF 3.30 pmClose

Employment Responsibilities: Employment Responsibilities: ParishesParishes

ByByAndrew MonroeAndrew MonroeEmployment Service ManagerEmployment Service ManagerCommunity Accounting PlusCommunity Accounting Plus

Main Topics for Today:Main Topics for Today:“Whistle-stop Tour”“Whistle-stop Tour”

• StatusStatus• Employed or Self-employed?Employed or Self-employed?• Worker or Employee?Worker or Employee?• Contracts of EmploymentContracts of Employment• HMRC: PAYE and RTIHMRC: PAYE and RTI• Further AdviceFurther Advice

StatusStatus Why is this important?Why is this important? Worker or Employee or Self-employedWorker or Employee or Self-employed (Gardener, Verger and Organist)(Gardener, Verger and Organist) Where does liability restWhere does liability rest PCC, if not self-employed?PCC, if not self-employed?

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The Daily MailForget clawing back billions from Starbucks, Google and Amazon... The taxman is targetting village cricket clubs!Payments to weekend scorers, Sawbridgworth Cricket Club was sent a bill for £14,403 plus £3,000 in ‘penalties and interest’. Chairman Val Waring said it was a 'David versus Goliath' battle for the club. HMRC eventually waived some of the penalties. But the 151-year-old club was forced to take out a loan, and to ask its 350 members to help pay the final bill of almost £15,500.

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Employee StatusEmployee StatusAre they Employed or Self-Employed?Are they Employed or Self-Employed?•Not determined by choiceNot determined by choice•Determined by the facts of the employment relationshipDetermined by the facts of the employment relationship•Self-employment elsewhere may not countSelf-employment elsewhere may not count•HMRC Website: Employment Status Indicator (ESI)HMRC Website: Employment Status Indicator (ESI)•www.hmrc/calcs/esi.htme.ge.gi.i.Do they have a Contract of EmploymentDo they have a Contract of Employmentii.ii.Do they have to do the work or can they hire someone?Do they have to do the work or can they hire someone?iii.iii.Do they get paid by the hour/weekly?Do they get paid by the hour/weekly?iv.iv.Do they set hours of work?Do they set hours of work?v.v.Do they supply their main tools of work?Do they supply their main tools of work?vi.vi.Do they have an established “business”?Do they have an established “business”?

Casual (Worker) StatusCasual (Worker) Status• No legal definitionNo legal definition• They carry out work personally, but have no Contract of They carry out work personally, but have no Contract of

EmploymentEmployment• Concept of “No Mutuality of Obligation”. If you do offer Concept of “No Mutuality of Obligation”. If you do offer

any work, they do not have to acceptany work, they do not have to accept• Hence each period of employment does not link to Hence each period of employment does not link to

another, thus continuity does not happenanother, thus continuity does not happen• Employment status is a “worker”Employment status is a “worker”• Limited employment rightsLimited employment rights• Beware “familiarity” leading to employee statusBeware “familiarity” leading to employee status

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Offers of Employment Offers of Employment • A contract exists as soon as an offer is made and is acceptedA contract exists as soon as an offer is made and is accepted• Conditional or Unconditional offersConditional or Unconditional offers• References / DBS checksReferences / DBS checks• Withdrawal of job offersWithdrawal of job offers• Need for contract of employment to have full terms and Need for contract of employment to have full terms and

conditions of employmentconditions of employment• Contract type, fixed/permanent etc.Contract type, fixed/permanent etc.• Written main statement MUST be provided within 2 months of Written main statement MUST be provided within 2 months of

starting work if employment expected to last longer than 8 starting work if employment expected to last longer than 8 weeks.weeks.

HMRC - PAYEHMRC - PAYE Legal obligation to deduct PAYE and NI (if applicable)Legal obligation to deduct PAYE and NI (if applicable) No longer any exemption for local religious centres.No longer any exemption for local religious centres. Do you need to register for PAYE? Yes if:Do you need to register for PAYE? Yes if: Pay above the PAYE thresholdPay above the PAYE threshold Pay above the NI Lower Earnings Threshold (£109/wk)Pay above the NI Lower Earnings Threshold (£109/wk) Worker has another jobWorker has another job Worker is receiving a state, company or occupational Worker is receiving a state, company or occupational

pensionpension IF REGISTERED YOU MUST REPORT ALL IF REGISTERED YOU MUST REPORT ALL

PAYMENTS IN RTIPAYMENTS IN RTI

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HMRC, PAYEHMRC, PAYE• Employment status? Employment status? • Includes payments to employees Includes payments to employees andand workers workers• Does new starter have a P45?Does new starter have a P45?• No – issue a P46 and get them to sign itNo – issue a P46 and get them to sign it• Where eligible *, if pay > £109/week (as of April 6Where eligible *, if pay > £109/week (as of April 6thth 2013) 2013)• * Obligations to pay Statutory Sick Pay* Obligations to pay Statutory Sick Pay• * Obligations to pay Statutory Maternity / Adoption or * Obligations to pay Statutory Maternity / Adoption or

Paternity PayPaternity Pay

Real Time Information Real Time Information (RTI)(RTI)

New as from April 2013New as from April 2013 All payments must be reported via RTI, on or before All payments must be reported via RTI, on or before

payment is madepayment is made HMRC can levy penalties for non-complianceHMRC can levy penalties for non-compliance RTI can only be reported via compliant softwareRTI can only be reported via compliant software Manual payroll no longer possibleManual payroll no longer possible HMRC provide their basic tools payroll which is RTI HMRC provide their basic tools payroll which is RTI

compliantcompliant Provide end of year P60’s to staffProvide end of year P60’s to staff

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Reporting in RTIReporting in RTI EAS – Employer Alignment Submission, a one off EAS – Employer Alignment Submission, a one off

submission before reporting, to provide basic data on submission before reporting, to provide basic data on workers (full name, NI number etc.)workers (full name, NI number etc.)

FPS – Full Payment Submission, reports what is paid to FPS – Full Payment Submission, reports what is paid to worker. MUST be on or before any payment made to worker. MUST be on or before any payment made to worker (weekly/monthly/quarterly etc.)worker (weekly/monthly/quarterly etc.)

EPS – Employer Payment Submission, made if what you EPS – Employer Payment Submission, made if what you pay does not match the FPS (eg. SSP payments)pay does not match the FPS (eg. SSP payments)

Beware irregular payments. If no FPS for 3 consecutive Beware irregular payments. If no FPS for 3 consecutive payments, HMRC will assume they are a leaver unless payments, HMRC will assume they are a leaver unless reported they are irregular!reported they are irregular!

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Further AdviceFurther Advice• CA Plus Website (CA Plus Website (www.caplus.org.uk))• Employment PagesEmployment Pages• Downloadable Advice GuidesDownloadable Advice Guides

• Free monthly Employment Newsletter via emailFree monthly Employment Newsletter via email• (Registration via website)(Registration via website)• Also, can be downloaded from websiteAlso, can be downloaded from website

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Andrew Kayley

Specialist Personal Tax (Charities) Bootle

What I will cover today?

• Gift Aid declaration recent changes

• Small Charitable Donations scheme

• On-line Claim Service

• Any other Gift Aid queries

Gift Aid declaration

Declaration must contain

• Name of charity

• Name of donor

• Donors home address

• Description of payment(s)*

• Declaration that payment(s) are Gift Aided

Charities must explain that the donor must have paid sufficient UK income or capital gains tax to cover the tax claimed by the charity (not including Council Tax & VAT)

Declaration

Gift Aid Declarations (GADs)

Feb. 2012 – new guidance published on GADs & introduced a GAD tick list

• Clarify (for donors) the requirement to pay sufficient income tax in each tax year

• Charities must keep GADs for 6 years (not 4 years) after last payment was claimed on

Declaration

Gift Aid Declarations(GADs)

• All existing GADs (& any pre-April 2000 Deeds of Covenant) are still valid for claiming purposes

• HMRC recommended all charities to update their GADs by 31 December 2012

• Do not have to introduce 3 tick box options on Gift Aid declarations

• Signature is still not required to make GAD valid

Declaration

Small Charitable Donations Act 2012 (Gift Aid small donations scheme)

From 6 April 2013; Charities, Churches & CASCs that receive small cash donations of £20 or less will be able to apply for a Gift Aid style repayment without the need to obtain Gift Aid declarations for those donations.

The total amount of the small donations will be capped at £5,000 per tax year = a top-up repayment of £1,250.

Summary of GASDS

• Only applies to donations received on/after 6 April 2013 (or Sunday 7 April 2013)

• GASDS is a public spending initiative (not a repayment of tax) that gives Charities & CASCs a top-up payment on donations they receive

• Charities & CASCS will claim a top-up payment of upto £1,250 on £5,000 max. of small donations received in any tax year

• 2 year time limit for claiming on GASDS donations

A small donation?

• A cash donation of £20 or less from an individual

• Donations must be collected and/or banked in the UK

• Cash donations from Companies or Trusts cannot be GASDS

• Membership Fees are not small donations for GASDS purposes

Interaction between GASDS & Gift Aid

• Charities must claim Gift Aid on donations that are at least 10% of the amount of their GASDS payments,

or

• The amount of GASDS received can be up to ten times the amount of Gift Aid payments received

• Called the “matching principle” ?

Declaration

The “matching principle”

A charity has income of £6,000 in 2013/14;

Gift Aid = £500 + GASDS = £5,500

Small donations are 10 times the Gift Aid donations

Charity can claim £125 on £500 Gift Aid + £1,250 on £5,000 of the total small donations received

Eligibility for claiming GASDS

1. The charity must have been in existence for at least 2 full tax years before it claims GASDS

2. Made successful GA claims in 2 of the previous 4 tax years, with no gap in claims of 2+ years

3.Charity has not incurred an HMRC penalty in respect of its GA or GASDS claims in the previous 2 tax years.

Why? - A good Gift Aid record gives some assurance to HMRC that a charity has appropriate internal processes in place to operate GASDS correctly

Connected Charities

The limit on which a Charity may claim a top-up payment may be reduced if a charity is connected with one or more charities.

This includes;

•The same person has control of both charities

•A group of two or more persons has control of both charities

Connected Charities

The restriction ensures as far as possible that charities that operate in a broadly similar way but are structured differently receive the same entitlements under the scheme

Prevents charities from fragmenting in order to be eligible for multiple GASDS allowances

Two Connected charities

Charity AGift Aid = £10,000

Small donations = £5,000

Charity BGift Aid = £5,000

Small donations = £2,500

Small donation claim

Charity AClaims £625 on £2,500 small donations only

Charity BClaims £625 on its £2,500 small donations

Community Buildings

The maximum small donations limit can be increased for charities running their charitable activities in community buildings.

If a charity runs activities at several centres then each centre could satisfy the community buildings rules.

“Running charitable activities in a community building” = local groups of at least 10 people that meet in the same building on at least 6 occasions each year.

The people meeting must be beneficiaries of the charity

Community Buildings

Includes;

•A village hall

•A town hall

•A church

•A synagogue

•A mosque etc.

•A school

Does not include buildings used wholly or mainly for residential purposes or the sale of goods e.g.

• Vicarage / Manse

• Care homes

• Residential Hospice

• Charity shops

Community Buildings

Two or more buildings on the same or adjacent land will be treated as a single building for GASDS community building purposes;

e.g. Church & Church Hall

A school that has 6 buildings in total

Church with a Garden Shed

HMRC can make an order that a building is, or is not, to be treated as a community buildings

Collections in a Community Building

Have to be 10 or more people present at every ‘Service’ for small cash donations to be eligible.

Not eligible

1. Money collected during a ‘Service’ when 9 or less people attended.

2.Money given in Collection boxes, wall safes or for lighting a candle by visitors

3.Cash donations handed to Vicar or Church Wardens whilst visiting Parish members in their home

Central Gift Aid scheme

Parish

Parish

Parish

Parish

Parish

Parish

ParishParish

Parish

Parish

Parish

Parish

Parish

Parish

ParishParish

£5,000 allowance divided equally amongst all 360

Parishes - Diocese will claim on up to

£5,000 for each Community

Building

Community Buildings

Diocese of Southwell & Nottingham

Independent parishes

Parish

Parish

Parish

Parish

Parish

Parish

ParishParish

Parish

Parish

Parish

Parish

Parish

Parish

ParishParish

Diocese

£5,000 small donation limit

divided equally amongst all 360

Parishes

Connected Charities

Each Parish will separately claim on up to £5,000 of the

Community Building amount

GASDS record keeping

HMRC will not be prescriptive but;

• Charities must be able to show that they have recorded cash collected in the UK & the cash was paid into a UK bank account

• Small donations & Gift Aid donations can be banked together – if supported by cash collection sheets

• The number of people that attended each service

Any Questions?

Charity Repayment Claim Options in 2013

HMRCCharities

HMRC Data Processing

Centre

Option 2Government

Gateway

Option 33rd. Party Software

(OOO’s of donors)

Gift Aid, Other Income & Charity Small Donation

scheme schedules

Option 1Paper Charity Claim form - ChR1 (2013)

Extracted Claim

information

By post

Charity Repayment

Service(Up to 1,000 donors)

On line

From own Laptop or PC

Claim data

Paper ChR1 Claim Form + ChR1CS (Continuation sheet)

Only available direct from HMRC

Form will be handwritten, scanned and data extracted

ChR1 - space for 15 Gift Aid donors + 6 Other taxed income items + 2 Community Buildings + 5 Connected charities

ChR1CS - space for 5 more extra Gift Aid donors

Photocopies not acceptable

Typed schedules & Covering letters not acceptable

Charity Repayment Claim service

Went Live in April 2013.• only charities registered with HMRC can use the Service• must first register on the HMRC website - Online services • ID & Activation PIN posted to authorised official• then need to Register and activate online service• separate service for Agents that submit claims on behalf of charities

3rd party Software route

• A data file is created (.xml schema) from a Gift Aid software package

• Submitted to HMRC via Government gateway

• Format of data is checked (validated) and acceptance of data is acknowledged

• Technical Specification made available end of October

• Test Service has been available since November 2012

• HMRC Software Developers Support Team (SDST)

Need more information?

Any Questions?

FEES & PCCs

David Meredith – Director of Finance

Andrea Pritchard – Senior Finance Officer

FEES & PCCs

What are parochial fees?

Fees set by General Synod and Parliament for certain occasional offices conducted by the Church

– marriages, funerals...

FEES & PCCs

What has changed?

•The level of fees has changed•Fees that were formerly payable to the incumbent of the parish are now payable to the Diocesan Board of Finance (DBF) under legislation.•PCC fees continue to be payable to the PCC.

FEES & PCCs

BackgroundGeneral Synod - Fees Policy Working Group

Four general principles:1. Justifiable2. Uniformity across the C of E3. Inclusive as possible – extras only to apply where

people have a genuine choice4. Affordable

FEES & PCCs

Background• National Church issue guidance document• Bishop’s Council consider policy regarding the

payment of fees to substitute ministers in September and October 2012

• Draft Diocesan Regulations & Guidance circulated for comment in November 2012

• Diocesan Regulations & Guidance issued in December 2012

FEES & PCCsWHERE THE MONEY GOES:- WHERE THE MONEY COMES FROM:-

PEOPLE COSTS

SUPPORT & FUNDING

CONTRIBUTIONS

NATIONAL CHURCH

DEANERY SHARE

CHURCH COMMISSIONERSMinistry Support

RETURNS ON INVESTMENTS

RESERVES

NATIONAL CHURCH COSTS (3%)

This pays for our contribution to national church costs, including training, the work of Archbishops' Council and General Synod.

SUPPORT, FUNDING CONTRIBUTIONS & ADMINISTRATION (6%)

Other than people costs we pay for all other diocesan administrative expenses and support costs.

This includes a support grant toFamily Care.

PEOPLE COSTS (91%)

The largest part of our budget funds people costs including clergy stipends, employee salaries, National Insurance contributions, pension contributions , housing of ministers, training and other staffing costs (removal & resettlement grants etc).

People costs include all stipendiary clergy and employees.

OTHER INCOME

DEANERY SHARE (68%)

Depending on the methodology of each deanery every parish will be apportioned an amount to pay.Deanery Synod Standing Committees are responsible for apportioning 100% of the deanery share that has been allocated to them. Deanery share is used to meet all the costs shown opposite most of which occur at the same rate per month throughout the year. We ask that parishes make every effort to pay the amount they have been requested monthly by standing order.

CHURCH COMMISSIONERS (16%)

The Church Commissioners allocates £34million to dioceses to pay clergy stipends and housing costs and most dioceses, but not all, benefit from this support.

The Church Commissioners also pay for bishops’ stipends, their office and working costs, most cathedral clergy stipends and grants to cathedrals.

RETURNS ON INVESTMENTS (8%)

The diocese earns income from investments with much of this income from rents on land and buildings.

OTHER INCOME (7%)

Includes parochial fees, chaplaincy and other income

Parochial fee income is the amount that is payable towards the stipend of incumbents from the fees for services such as weddings and funerals. We receive some contributions from other sources as well.

TRANSFER FROM RESERVES (1%)

We are planning for a small transfer from reserves to finance part of the budgeted expenditure.

DIOCESAN BUDGET 2013

FEES & PCCs

How were the figures calculated?DBF fees are built up from assumptions about the costs of ministry (from published statistics) and the likely number of hours needed to provide a good ministry for the particular service.PCC fees include a location/building element based on national statistics for the overall costs of repairs and maintenance of church buildings and the number of hours in use, and an element for administrative staffing based on a secretarial rate of pay.PCC fees for burials and monuments include an element to provide for long-term maintenance of the churchyard.

FEES & PCCs

How were the figures calculated?PCC fees (continued)

Heating and the cost of deploying vergers are not covered by the statutory fees, and so PCCs are able to charge for these items as ‘extras’, decided locally, if the person paying the fees wishes to have them.

Travel expenses are not included in parochial fees, and the previously issued guidance about travel expenses remains in force.

FEES & PCCs

FEES & PCCs

FEES & PCCs

FEES & PCCs

Payments to substitute ministersThe DBF fee is legally owned by the DBF and it is for the DBF to decide the purposes to which that income should be applied. In our diocese, Bishop’s Council approved 50% of the DBF fee to be offered to a minister not in receipt of a stipend.Before the new Regulations and Guidelines only retired clergy with the Bishop’s Permission to Officiate (PtO) were offered fees.From January 2013, all retired clergy who have the Bishop’s Permission to Officiate should be offered fees as set out in the Diocesan Table of Apportionment of Fees. From 1st April 2013 in addition to retired clergy with Permission to Officiate, all licensed self-supporting ministers and licensed readers will be eligible to claim 50% of the DBF fee for weddings and funerals as appropriate as set out in the Diocesan Table of Apportionment of Fees. Ministers receiving such payments are responsible for declaring this income to HMRC for tax purposes.

FEES & PCCs

What PCC items are specifically covered by parochial fees?

The Order specifies that statutory parochial fees include any costs and expenses incurred in relation to a service for:

•routine administration(including arranging dates, times & making entries in registers)•making the Church available•lighting

It is unlawful to make any additional charge, besides the parochial fee, for these items.

FEES & PCCs

PCC “Extras”

Statutory parochial fees do not include payment for “extras”.

“Extras”:•can only lawfully be charged for items over which those receiving the ministry have been given a genuine choice.•should never be imposed by the incumbent or PCC where those paying the fees have not agreed that they wish to be provided with the “extras” in question.•charges need to be both realistic and fair.

FEES & PCCs

PCC “Extras”

Examples of the items for which a parish may decide to make an extra charge include:* heating;* the services of a verger;* the services of an organist, choir or bell-ringers;* sheet or recorded music that has to be specially purchased;* the provision of recorded or taped music;* the taking of films, video or sound recordings (where permitted);* flowers;* special furnishings.

FEES & PCCs

http://justforvicars-yourchurchwedding.org/resources/downloads/wedding-fees-form-2013

FEES & PCCs

Can fees ever be waived?

Under the new arrangements the incumbent or priest-in-charge of the benefice concerned has an enhanced right of waiver, after consultation with the churchwardens, for PCC fees.

However, an incumbent/priest in charge cannot waive fees generally. They may only be waived “in a particular case”. That means that the incumbent/priest in charge should be prepared to give a reason for any decision to waive a fee.

FEES & PCCs

What about a larger fee if the parish church is a large building?There is no provision for variable charges according to the size of building. The Fees Policy Working Group looked at this and suggested that in exceptional cases an additional voluntary contribution may be invited (following consultation in every case with the archdeacon or other diocesan advisor).Why? The working group had 2 reasons:1.The desire to maintain a uniform fee wherever a person happens to live2.Difficulty in establishing a legally clear method for “banding” church buildings

FEES & PCCs

Travel expenses

No element for travel expenses is included in parochial fees.

Any travel expenses paid by the Funeral Director are in addition to fees.

See the booklet ‘The Parochial Expenses of the Clergy – a Guide to their reimbursement’.http://www.churchofengland.org/clergy-office-holders/remuneration-and-conditions-of-service-committee/the-parochial-expenses-of-the-clergy.aspx

FEES & PCCs

FEES & PCCs

New Record of Parochial Fees Return•Introduced for use from 1st January 2013.•Each parish/group has a unique fees reference number•We ask that these are filed with payment:

•larger parishes – monthly•smaller parishes – at least quarterly•a “nil” return is required for the quarter if no fee

income has been received.•We recommend that churchwardens/treasurers make

arrangements to collect fees and complete the Return.

FEES & PCCs

Impact of new regulations & guidance

Individual clergy no longer assigning fees and completing Returns.

Larger parishes- administration generally in place, Parish Administrators

Smaller parishes- fewer occasional offices- administration impacting on PCC treasurers/churchwardens

FEES & PCCs

Accounting for parochial feesRemember the DBF fee legally belongs to the DBF.

PCCs should only account for their portion of the statutory fee in:•PCC annual accounts.•Return of Church Finance Form

No need to open a separate bank account for fees.

FEES & PCCs

Parishes in sequestrationA new form available to download from the diocesan website of a printed copy can be obtained from the Clerk to the Registrar.Fees for weddings & funerals should be accounted for on the new Record of Parochial Fees Return.Where a parish is in sequestration, retired clergy with Permission to Officiate only, should be offered a Casual Sunday / Weekday Duty Fee as set out in the Diocesan Regulations & Guidelines and travel expenses.The current Casual Duty fee is £30.00.

FEES & PCCs

MonumentsLegally, no monument can be erected in a churchyard without a faculty. In practice, however, the consistory court generally does not insist on a faculty for an ordinary monument provided it complies with whatever general directions for the diocese the Chancellor may have issued, and provided also that the incumbent consents.

Please consult the Clerk to the Registry for further advice!

FEES & PCCs

Funeral Directors

•Guidance has been issued on the new fees arrangements to funeral directors.•No payments in cash.•New from January 2013, where there is no service in church, but a service in a crematorium or cemetery, a statutory fee of £160 is payable, with £21 payable to the PCC.•For funerals at a crematorium, if the minister is not on the staff of a local church, and it is not clear which PCC should be paid, funeral directors have been directed to make payment to the Diocesan Board of Finance on the relevant form.

FEES & PCCs

FEES & PCCs