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RTI on voluntary payments

RTI on voluntary payments

I recently took over as Hon Treasurer of a small club. For historic reasons this is a limited company and is run by the Committee who are directors of the company.

At the AGM honoraria of £100 have been voted in the past to each of three members of the Committee, Secretary, Membership Secretary and Treasurer, and again all three are directors. It has occurred to me that RTI submissions should be made when the honoraria are paid, and we will need to register a PAYE scheme. This is assuming that the relevant office holders all have employment income from other jobs, which seems to be the case. 

This is something of a bureaucratic nuisance and I want to be persuaded that RTI does not apply. Can anyone confirm my understanding or otherwise.


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18th Feb 2016 19:52
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19th Feb 2016 10:20

I agree

... but the link provided above refers only to NIC.  Honoraria are both taxable and NIC-able as set out on page 63 (PDF page 68) of the Employer's Guide CWG2.  No NIC will be payable on a payment of £100.  Tax will depend on whether the officers have other jobs or pensions - if they do, as seems probable, you will need to set up a PAYE scheme, deduct tax and submit an FPS under RTI.  In the circumstances, an Annual Scheme would be appropriate, so you would have to submit a RTI return only for the one month in which the honoraria are paid.

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By DMGbus
19th Feb 2016 11:01

6 April 2016 onwards - trivial benefits

HMRC have stated that they propose that gifts of goods to employees not exceeding £50 per gift (and not exceeding £300 pa ie. 6 x £50 max in a tax year per employee) will be non-taxable from 6 April 2016.

So, if the concept of honoraria was dispensed with and instead a scheme of gifts be put in place I see that as averting a PAYE tax deduction.   2 x £50 gifts = £100 instead of 1 x £100 less £20 PAYE = £80 received by the Club's officers.

For 2015/16 there is a scheme of trivial benefits being tax-free but HMRC guidance lacks guidance on a specific monetary value - what is new for 2016/17 is that specific values are now being stated in the guidance.

PS. The gifts cannot be cash or vouchers.  I suppose for alcohol consuming committee members it could be an appropriate number of bottles of whisky.  Or another option in HMRC's guidance is turkeys (say at Christmas). 

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19th Feb 2016 12:22

Not trivial benefits

The whole point of trivial benefits is that they must not replace payments for work done, or work done well.

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By DMGbus
19th Feb 2016 14:11

Guidance - trivial benefits

The 12 pages of latest guidance that I have read makes no reference to trivial benefits being replacing salary or wages and therefore "not allowed".

The whole point of honorarium is that it is not wages / salary anyway.  It is a non-contractual entitlement - more of a voluntary payment (akin to a gift). 

Difference being that gifts have the exemption but cash does not.

I see no problem with a club that decided to stop honorarium and instead  deciding (from 6 April 2016) that club officers could choose to receive upto two tax-free gifts in a year not exceeding £50 cost each to the club in recognition of their voluntary help.  



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19th Feb 2016 14:31

Trivial benefits again

I've tried hard to find the new S323A ITEPA 2003 in Clause 8 of the draft finance bill online, which was the reference given by Robert Jamieson in a CPD lecture this week.

Due to my inexperience/general hopelessness I couldn't find this exact item on the internet. However Mr Jamieson said there are 4 conditions where the benefits won't be chargeable to tax. One of these conditions is:"the benefit must not be provided in recognition of services performed by the employee in the course of his employment or in anticipation of such services" so can't be for anything work related.

Of course honoraria are not the same thing as salaries/wages.

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