Can our charity make a small payment for work done?
As a good accountant, my answer is it depends……
A Trustee can not be paid for any work they do unless it is authorised in the trust deed (or articles of association) which would have been agreed by the Charity Commission. They can be reimbursed for reasonable expenses incurred on behalf of the charity.
If a payment is made to a non trustee, often described as an honorarium then tax should be deducted at source. If you do not a have PAYE scheme setup with the Revenue then this will need to be actioned.
The Revenue and the government are refocusing their attention on employment status. The law has been amended to stop the public sector paying people through a service company and this is being extended to larger companies/organisations. I would recommend reviewing your existing contracts with individuals . It is the day – to – day arrangements with that person that matter. One “badge” of self-employment was the ability to put in a substitute to ensure work is completed but this has been challenged in case law. In Uber AV v Aslam, Uber’s assumption that the drivers were small business people was not accepted by the Courts.
If you have self-employed people working with you are your treating them correctly? If not, and the Revenue successfully challenges you, you will be liable for the missing tax, NI, Interest and penalties. An expensive misinterpretation.
In December 2018 the Government issued the Good Work Plan. Although not legislation there are some points to note, but mainly more job security for zero hours workers including allowing workers to request a more fixed work patter after 26 weeks service
From April 2020, there will be a right to a written Contract of Employment from the first day of work. The reference period for holiday pay is extended from 12 weeks to 52, this is particularly relevant to irregular pattern workers.
Following the revelations of sexual harassment, the Equality & Human Rights Commission (EHRC) is developing a code of practice covering employers’ legal responsibilities to protect staff from sexual harassment. In advance of this, Charities need to review and update their policies and assess their workplace culture.
The final area I want to mention is to be careful that volunteers do not become employees, unless that is your intention. Consider your relations and interactions and make sure the boundaries are clear.
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