Following changes in tax legislation, the working expenses agreement between the Church Commissioners and HM Revenue & Customs regarding reimbursement of certain expenses is no longer is in force. The following document is now available in the Church of England Document Library, and more detailed information on reimbursement of expenses for clergy and their tax advisor can be found here.
Working Expenses: Exempted items Information
Due to changes in tax legislation the working expenses agreement between the Commissioners and HM Revenue & Customs regarding reimbursement of certain expenses is no longer is in force. An exemption for reporting information on the tax return in respect of paid or reimbursed expenses does apply so long as the reimbursement is for costs wholly, exclusively and necessarily incurred in the performance of duties.
Items under the exemption:
- stationery, postage, use of telephone, etc., where incurred in connection with the minister’s duties;
- secretarial assistance, where necessarily incurred in the performance of the minister’s duties;
- expenses necessarily incurred in connection with an unpaid ecclesiastical appointment, for example rural dean, honorary canon or proctor in convocation;
- books purchased for use in the conduct of services or preparation of sermons
travelling expenses, where necessarily incurred in the performance of the minister’s duties;
- repair or replacement of robes worn in the conduct of church services in accordance with Church Law or by custom in the particular church;
- provision of a locum tenens;
- provision of reasonable entertainment on official occasions to visiting ministers, officers of the church or members of church organisations;
- communion expenses, for example supply of wine;
- one-quarter of the expenditure on the maintenance, repair, insurance or management of any accommodation that is made available to the minister.
Full information on reimbursement of expenses for clergy and their tax advisor can be found at https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim60046.
Frank comments: “Coincidentally, HM Treasury currently has an open call for evidence on taxation of employee expenses. Its main objectives are to understand:
– if the current rules or their administration can be clearer and simpler;
– whether the tax rules for expenses are fit for purpose in the modern economy; and
– why the cost to the Exchequer of the tax relief for expenses which are not reimbursed has increased.
The consultation closes on 10 July: submissions should be made to email@example.com.