What about income tax?

PAYE

As an office holder, you come within the Pay As You Earn system, where we are required by law to deduct tax from your stipend at source. HM Revenue & Customs (HMRC) will calculate a tax code to reflect your personal circumstances and will notify you of it on Form P2. If you have any questions on this calculation, or disagree with it, you should contact the HMRC immediately.

HMRC will also notify us of the code (but not how it is calculated) so that we know how much tax to deduct each month.

Any income you receive locally (e.g. fees) without deduction of tax at source is still liable for tax. You will need to declare it on a tax return (and you may wish to give the Revenue an estimate in advance). Your tax code will then be adjusted so that the tax due can be deducted by us.

Benefits in kind

If the total of your stipend exceeds £8,500 p.a., you will be liable to pay tax on certain "benefits in kind" you receive (e.g. the tax-free element of your stipend reflecting heating, lighting, cleaning and garden upkeep costs at your official house). This extra tax is calculated according to a complicated formula explained in a separate publication "Tax on Service Benefit", available from the resources on the left hand side of this page (this document requires Adobe Reader). The provision of free housing, however, is not a taxable benefit and will not incur any additional tax liability.

Press here for further details about beneficial loans.

Further information

While you are paid through this office your tax affairs are dealt with by the West Yorkshire & Craven Area Office of HMRC.  They have provided a dedicated telephone number for those paid through our payroll. The number is 01274 205 714. While the Clergy Payments Department is always ready to advise generally on tax matters it is not in a position to deal with individual tax affairs. If you do need professional help, you should seek it from a qualified professional who is experienced in clergy taxation. Further advice is also available in a booklet entitled "The Taxation of Ministers of Religion", published by the Churches' Legislation Advisory Service (formerly the Churches Main Committee).