Tax Advice for Ministers of Religion

Most non-PAYE workers have fairly simple tax affairs and are not required to complete Self Assessment tax returns. However, if you’re in a certain occupation, you do have to complete it annually. Ministers of Religion (MoRs)…

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Most non-PAYE workers have fairly simple tax affairs and are not required to complete Self Assessment tax returns. However, if you’re in a certain occupation, you do have to complete it annually. Ministers of Religion (MoRs) are one major example.

Tax advice for a Minister of Religion isn’t as widely available as it should be. That’s why we’ve created this comprehensive guide. Read on to discover which costs you can claim on, and how GoSimpleTax can help…

CHECK WHICH PAYMENTS THE CHURCH HAS REIMBURSED

You may have paid for fuel, electricity or robes worn for divine service – any number of things that are classed as necessary for your duties. That’s how allowable expenses are defined: the tools or resources you can’t be without. Yet it’s crucial to know what the church has repaid over the year.

Your employer (the church) will provide you with the P11D form at the end of the tax year. This form indicates what taxable benefits or payments for reimbursed expenses you have received. Such information is then added to your Self Assessment tax return prior to submission to HMRC. 

Separating expenses into a ‘self-paid’ and ‘reimbursed’ list will, over time, make the eventual Self Assessment easier – unless you have tax return software to do it for you. Tools like GoSimpleTax can split your expenses so they fit each category. It’s fast, easy, and simple to use on any mobile device.

THE MAXIMUM RENT YOU CAN CLAIM IS 25%

MoRs may work in their home office: rented accommodation that the affiliated church doesn’t cover. HMRC allow you to claim a portion of the rent as an expense, calculated by the number of rooms used for ministerial purposes.

For instance, you could be living in an eight-room house, using a single study area to organise your day, perform admin tasks and research scholastic material. Two rooms – one for study, the other for receiving parishioners every week perhaps – would add up to 25%, but that’s the limit for this claimable amount. You can’t go higher.

A further example: Let’s say you pay £650 per month (£7,824 per year) rent and 1 of your 8 rooms is used for your ministerial work. You can claim tax relief on expenses of £7,824 / 8 x 1 = £978.00. If you are a basic-rate taxpayer then this would reduce your tax bill by £978 x 20% = £195.60. But please note the maximum amount of rent expenses you can claim is limited to 25% of the total amount or rent paid in the year. 

Again, GoSimpleTax can be used to make the calculations easier. Simply input your expenses, together with any income, and our software will automatically work out your expected tax bill.

SECRETARIAL ASSISTANCE AND TRAVEL CAN BE CLAIMABLE

Where ‘necessarily incurred’ while performing your duties, secretarial assistance and the cost of any journeys from one place of work to another can be claimed as expenses.

Secretarial assistance allowable expenses also include sums paid to a spouse or partner that has carried out such duties. If they are a church member, however – such as a fellowship meeting leader –  this isn’t allowable.

Travel expenses are generally paid or reimbursed by the church. But if you have paid them yourself, or the church has reimbursed you less than HMRC’s approved mileage rates, then these expenses count too. 

Add these to your mobile tax tool for rapid calculation – with a full GoSimpleTax account, all you need to do is upload a photo of the receipts you’re issued or the mileage log you’re keeping. 

DON’T FORGET ABOUT CONSUMABLES, BOOKS AND CLOTHING TOO

Catholic priests can claim on the bread and wine used for Holy Communion. Tattered scripture can be replaced, and counts as an allowable expense. Tax advice for a Minister of Religion includes making sure you claim back on anything that may be broken, consumed, worn down or repaired for the job you carry out.

It’s worth staying on top of everything throughout the financial year in real time. GoSimpleTax is your best bet for doing so. Whenever tax law is updated for MoRs in the UK, it knows what to assess, and even tells you where further tax savings could be made.

What’s more, GoSimpleTax links to HMRC’s digital portal for a seamless Self Assessment tax return submission. While this is a feature of our upgraded account, you can start using us now without paying a penny. A free trial of our software enables you to start logging income and expenditure, and working out your tax bill. Try it today

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