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When is an Honorarium not an Honorarium?

What is the upper limit of value received and what regularity of payment defines an honorarium?

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An officer of a mutual membership society I belong to receives an honorarium of £150 per month (in addition to any expenses incurred).  I appreciate that it falls under the definition of Taxable Income for the individual (who is retired and does not pay NI).  My question is, does a figure this high and paid every month fall into the definition of an honorarium and also is the society liable for any further liability for NI?  The Officer is not an employee.

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By David Ex
23rd Jan 2022 00:45

I don’t think honorarium has any meaning/relevance for tax purposes.

https://www.accountingweb.co.uk/any-answers?search=honorarium#block-sm-p...

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Replying to David Ex:
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By Paul Crowley
23rd Jan 2022 02:24

I agree
A fee by any other name
A Doctor clients gets at least three "honoraria" a year for speaking and editing and such stuff
Superd circular link

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Replying to Paul Crowley:
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By zebaa
23rd Jan 2022 09:53

Having, in the past, received such a payment I can confirm it is taxable and he is an employee, with the obligations that entails.

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By Hugo Fair
23rd Jan 2022 18:14

"The Officer is not an employee"
... this is irrelevant.

"An officer .. receives an honorarium of £150 per month (in addition to any expenses incurred)"
... whilst I'm not aware of any defined regularity in legislation or in HMRC guidance, most sources associate an honorarium with an ad-hoc payment (that is specifically not tied to any performance of work) - so monthly would at the very least be a 'red flag'.

"I appreciate that it falls under the definition of Taxable Income for the individual (who is retired and does not pay NI)"
... so what lies behind your question "does a figure this high and paid every month fall into the definition of an honorarium?" - in other words what is the impact of whether or not you treat this as an honorarium?

"is the society liable for any further liability for NI?"
... if you mean as a general concept then, Yes - see https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim02205 (Such payments are “earnings” for the purposes of section 3(1) SSCBA 1992 and will be liable for Class 1 NICs) - although at this level that's fairly academic.

BTW, don't forget that from 6th April onwards any NI'able earnings paid to someone who has reached SRA will no longer be free of NICs - in 2022-23 it will be subject to the 1.25% for the Health & Social Care fund, and in subsequent tax years an HSC levy will be applied (separately from NICs) at that rate.

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Replying to Hugo Fair:
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By Tax Dragon
23rd Jan 2022 19:11

Do you see any reporting obligation (and potential NIC liability) in relation to the expenses payments?

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Replying to Tax Dragon:
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By Paul Crowley
23rd Jan 2022 20:31

My comment would be to identify if a PAYE scheme exists?
If so is there any basis for not reporting a monthly "Honorarium" under RTI?

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Replying to Tax Dragon:
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By Hugo Fair
23rd Jan 2022 21:20

As with employees, any reporting obligation will depend primarily on the nature of the expenses ... and hence whether or not those are liable to Tax or NICs.
I know that HMRC are not happy when someone is added to the FPS solely to report non-taxable expenses (i.e. person is, say, solely an officer of the company and receiving no earnings but gets reimbursed for expenses covered by a dispensation) - but that isn't the case here.
However if the person is already being reported within the FPS - see next para - then there is a data item in the FPS called 'Value of payments not subject to tax or NICs in pay' that should be used for expenses that are neither taxable nor NICable.

Paul's point is pertinent in a different way - in that if there isn't already a PAYE scheme (for other employees) then there's no need to set one up just to report the honorarium amounts - because of the amount not the type of payment;
whereas if such a scheme already exists then the honorarium amounts are meant to be reported within the FPS (even if there's no Tax or NIC deductions to report).

We don't currently know why OP asked "does a figure this high and paid every month fall into the definition of an honorarium?" - i.e. what is the concern regarding whether or not this is treated as an honorarium (ignoring for now that there's no such distinct type of payment of which I'm aware in the legislation)?
So we may well be chasing rainbows in terms of providing relevant 'answers'.

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