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, certain occupations are required to complete annual tax returns, for example, Ministers of Religion (MoRs).

Tax advice for a Minister of Religion may not be widely available, so we suggest you read on…

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. This information is 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.

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 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.

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. 

Secretarial assistance and travel can be claimable

Where ‘necessarily incurred’ in 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, such as a fellowship meeting leader, however, this is not 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 can be included.

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 having an intelligent piece of tax return software to add it all up through the financial year in real-time. GoSimpleTax is precisely that. We’ve designed a mobile calculation tool for MoRs in the UK. Whenever tax law is updated, it knows what to assess, and even tells you where further cash could be saved.

What’s more, GoSimpleTax links to HMRC’s digital portal for a seamless Self Assessment submission. Try our 14-day free trial to solve those tax concerns for as long as you’re serving the faith…

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