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
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/
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:
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
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