Managing Church Payroll Webinar 22 March 2019 Karen Peacock, Payroll Manager, West of England Baptist Payroll Company A recording of this training session and the slides will be available on the BUGB website

What we will be covering Introduction to payroll Setting Up a Payroll Approaches to running payroll Starters and Leavers Overview of PAYE (including HMRC payments and RTI) Pensions and Auto-Enrolment Minimum Wage Holiday pay, Sick Pay & Maternity/Paternity Pay Payslips and record keeping Handling expenses and benefits Year-end process

Introduction Who is this Webinar for? When do you need to have a payroll? Who needs to be included in your payroll?

Setting Up A Payroll You need to register as an employer with HMRC to obtain a scheme reference https://www.gov.uk/topic/business-tax/paye Ensure staff have written contracts of employment or terms of appointment. Select an approach to running your payroll

Approaches to running payroll Use the HMRC “Basic Tools” software (free) Use a commercial software package (which must be kept up to date with latest tax rates) Outsource to a payroll company (e.g. West of England Baptist Payroll Company)

Starters and Leavers Starters Request their P45 from previous employment, or complete a P46 Complete starter form with personal and pay details – your software / supplier should provide this …and of course any necessary pre-employment checks! Leavers: Pay final balances (holiday pay owed etc) Issue P45 after final pay. Report as a leaver to HMRC in next RTI submission

Overview of PAYE (1) PAYE = Pay As You Earn. Covers three main employment taxes: Income tax Employee’s National Insurance Employer’s National Insurance Rates are at https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020

Overview of PAYE (2) You need to: Calculate tax and net pay (usually automatic within the software) Pay the members of staff the net pay Make the payment due to HMRC by the 21st of the following month Submit an RTI return every time you pay staff Don’t forget to claim your £3,000 employers NI allowance! (see guidance leaflet F06: www.Baptist.org.uk/resources/F06)

Pensions and Auto enrolment Under Auto-enrolment regulations, employers must offer a pension to all staff: Staff earning above £10k, must be enrolled into a compliant pension scheme for Auto Enrolment (e.g. NEST or Baptist Pension Scheme) Staff can subsequently opt out (only after enrolment) Declaration of compliance must be completed with the Pensions Regulator Process must be repeated every 3 years

Minimum Wage Employers are obliged to pay minimum wage to all employees. Rates from April 2019: There are also specific rates for apprentices Age: 25 and over 21 – 24 18-20 16 – 17 Rate: £8.21 £7.70 £6.15 £4.35

Holiday pay, Sick Pay & Maternity/Paternity Pay Holiday pay – all staff entitled to minimum 5.6 weeks paid holiday per annum (including bank holidays) Sick pay (NB – cannot be reclaimed from HMRC): Statutory Sick Pay Contractual sick pay Maternity / Paternity pay (can be reclaimed from HMRC): Maternity: 39 weeks paid Paternity: 2 weeks paid

Payslips and record-keeping You must provide each person on the payroll with an itemised payslip that details their pay and all deductions This allows an employee to check that they are paid correctly Need to keep records for accounting purposes and to respond to any HMRC queries / investigations Copies of payslips, P32 (report on amount due to HMRC) and YTD Totals. Should be automated within payroll software Need to keep for 5 years

Handling Expenses and Benefits Minister’s taxation is a complex area, particularly in relation to living accommodation Baptists Together produce detailed guidance at www.Baptist.org.uk/resources/X03 Certain payments are subject to Tax and NI and therefore need to be put through payroll. E.g. Manse heat and light payments Specific out-of-pocket expenses and mileage (not round-sum allowances) can be paid directly to staff outside of payroll

Year End Process Make Year end RTI submission to HMRC Produce P60 for each current person on the payroll If you have issued a P45 to a leaver before year end you do not need to produce a P60 Produce and submit P11D for benefits outside of payroll Provide a copy to employee for their tax return Submit to HMRC Move Payroll to new tax year and update tax codes (should be automated within most commercial software)

Final thoughts Running payroll successfully requires care and diligence If you are unsure of anything, check HMRC website or BU guidance (www.Baptist.org.uk/resources/X03) If it all sounds too scary, then consider outsourcing to a payroll bureau West of England Payroll Company are the specialists in Baptist Churches, currently handling around 300 churches and 500 employees.

Additional Resources BUGB guideline leaflets on website: X03 Taxation Guidelines for Churches and Ministers, L08: Employment F06: Employment Allowance Terms of Appointment (full time or part time) Look out for taxation updates in Transform HMRC run webinars and produce extensive guidance Further questions to supportservices@Baptist.org.uk Detailed taxation advice can be obtain from our Honorary Tax advisor, Philip Cooke: philipjcooke@aol.com

Any Questions?