Finance

Employing People

Many local churches employ people; organists, caretakers, children or youth workers, outreach or community workers, vergers and many others.

Often ‘volunteers’ who receive a benefit or payment for the duties they undertake might actually be ‘employed’ in the eyes of the law and tax authorities and this presents considerable implications.

A guide has been drafted to assist parishes with this area:PAYE guide March 2017

HMRC provides definitive guidance on all aspects of employment: https://www.gov.uk/employing-staff

Clergy Expenses

Churches are responsible for the payment of certain expenses incurred by those serving in ministry within their area.

The Clergy Parochial Expenses guide can be found: http://www.churchinwales.org.uk/structure/representative-body/finance/parochial-expenses/

Accounts and Budgeting

The Representative Body of Church in Wales offers a series of useful templates and spreadsheets to help your church prepare annual accounts and a yearly budget. These are designed to replicate the format of the Annual Financial Return and to be compliant with guidance issued by the Charity Commission. http://www.churchinwales.org.uk/structure/representative-body/finance/parish-accounting/

Other useful websites offering Accounting and Budgeting advice are: ACAT, and     CofE Parish Resources.

Charity Registration

PCCs with annual gross income over £100,000 are required to register with the Charity Commission (If your normal income is £80,000 or less, but exceptionally you exceeded the £100,000 threshold last year due to a grant, legacy or particular building campaign, you can apply for a written determination that you need not register.)

Details of how to register and further information can be found:

http://www.churchinwales.org.uk/structure/representative-body/finance/charity-registration-for-parishes/

http://www.parishresources.org.uk/pccs/registration/

 

VAT – Zero-rated or Reduced-rated VAT

(a) Listed Places of Worship – Grant Scheme

From 1 April 2004 the Chancellor of the Exchequer agreed to a return in grant aid of all VAT on eligible repairs and maintenance work carried out after 1 April 2004.

Application forms for grant assistance, together with detailed information about the scheme can be obtained from www.lpwscheme.org.uk

(b) Other

HMRC allow certain building works to be zero-rated, providing the building works are eligible and the building is used for a “relevant charitable purpose”.

Your VAT-registered builder should give you an invoice showing where the exemption has occurred.  They will need a certificate from you stating that you are a charity, and the building is used for charitable purposes. Please note that the rules are complex and before issuing a certificate you should get copies of the relevant notices from HM Customs & Excise.

  • Note 708 July 2002 (VAT – Buildings and Construction)
  • Notice 701/7 August 2002 (VAT Reliefs for disabled people)

For further information: https://www.gov.uk/vat-charities/what-qualifies-for-relief