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Tax treatment of Honoraria payments to officers

Tax treatment of Honoraria payments to officers

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I have recently taken on the independent examinaton of a small club.  The new treasurer and I have started to discuss the treatment of payments of honoraria to some of the officers, and we are keen to ensure we are correctly processing the payments.  The payments are generally to cover expenses of the officers, although there is no expense process, it is purely to compensate the officers for out of pocket travel, working from home costs, etc. 

Does the club need to process the honoraria payments via PAYE or can these form part of an expenses system, i.e. as a use of home expense, or following some other formal expense system, such as mileage, travel ,etc?  Or would it be possible to ask the officers that receive honoraria payments to sign a confirmation that they will declare the income and pay any appropriate tax?

I have tried to look into this in more detail elsewhere, but there is little information regarding honoraria payments to officers - the examples available only seem to refer to officers that are clearly employees, however, I am not sure the officers of this club would be considered employees as there is no employment contract. 

Any guidance or experience of others in this area would be greatly appreciated.

 

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By Accountant A
01st Feb 2019 19:16

The answer is a "yes" taxable and NI able. Expenses are OK subject to the usual conditions.

If you Google "honoraria+HMRC" you get all manner of useful links including a relatively recent tax case.

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By WhichTyler
02nd Feb 2019 20:45

People often think that 'honorarium' is a king of magic word that gets them out of tax. It isn't.
They are either earning a fee for their work in the office they hold, or being reimbursed for expenses they have incurred.

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By Jan CM
11th Feb 2019 12:09

Thanks AccountantA and WhichTyler for your responses. Very much appreciated.
We need to be clear what the payments represent and ensure they are treated appropriately going forward.

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