Honoraria and Self Employment

Honoraria

 An `honorarium` is a payment made to a person for their services in a volunteer capacity.  It is a one off payment that is not expected – a ‘thank you’.

It is only acceptable to pay an honorarium if it is totally unexpected and there is no precedent surrounding it. However if it can be proved that there was an expectation that the payment would be made in return for a certain piece of work, length of service, or on leaving the organisation then the payment would not be an honorarium.  It would be a ‘payment’ and would therefore be taxable and give the volunteer employee status.

It is best to be extremely wary about paying honoraria.  If the volunteer does not declare the payment on their Tax Return, the Inland Revenue could come to the Church/Circuit for the Tax/NI on the basis that there was a ‘contract of employment’.

Self Employment

 The rules for being Self Employed are very strict.  Self employment is not an acceptable way for the Church to take the easy option of getting a job done without the need for paper work. As a first step, it is essential to ask the self employed person for a letter from the Inland Revenue stating that she/he has self employment status.  Then there is the whole area of where, when, and under whose supervision the person will work.  There are very few times when the Self Employment rule is applicable in our work as a Church. If in doubt please ask for advice