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Newth Talks Tax: Wedding income

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24th Nov 2008
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Wedding income

Gary Hochmuth disclosed that his client had received a round sum amount for attending a number of weddings where he held the post of verger, in his query of 16 October 2007. Gary asked if this income is taxable and, if so, where should it be disclosed in the tax return?

This was one of the rare occasions when a query had no replies, so the thoughts expressed in this item are mine alone.

My reaction to this query some years ago would perhaps have been that HMRC would probably not follow up this sort of transaction. It is probably part way between a fixed charge and a voluntary gift.

However, everything has changed now, particularly following the merger between the Inland Revenue and Customs & Excise. HMRC has embraced the principles of what was Customs & Excise – i.e. ‘tax anything that moves’. There are two other reasons following on from this about the current attitude of HMRC. One is that the government wants to avoid increasing the basic rates of tax at all costs, so that HMRC must find subsidiary ways of raising revenue. And, of course, the main function of HMRC is now compliance and investigation.

As regards weddings (and indeed funerals) anecdotal reports indicate that HMRC have been targeting these areas in order to assess the small amounts involved in each case, but which nationally come to a substantial sum. For instance there are reports that organists at weddings have been targeted to ensure that they have declared the fee that they receive. Similarly gravediggers and funeral parlour staff have been investigated to ensure that they have declared income received for casual services rendered in connection with funerals.

A verger holds an office within a church. Whereas the role of churchwarden is likely to be a voluntary one, a verger is likely to be paid by the church involved as an employee exercising an office, and therefore is taxable under PAYE. This is, of course, in respect of their regular duties at the church.

Because a church office is held, there is no doubt in my mind that income from weddings received by the verger is taxable. It is analogous to the Easter offering normally receivable by the incumbent, who is also taxed under PAYE on their income from the Church Commissioners, but has to declare this additional income.

Amounts paid in respect of a wedding do not neatly fit into the dicta regarding isolated transactions and repeated transactions in the HMRC Business Income Manual at BIM20230 and BIM20235 or similarity to existing trade at BIM20270. The function of a verger is not a trade, but at a wedding neither is it part of the office of a verger as an employee of the church. Any assumed contract is between the bride and groom and the verger personally, and the church is not involved. On this basis amounts received from weddings should be declared by the verger as ‘other income’, with perhaps an explanation in the ‘White Space’ and an accompanying letter.

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