Staff handbook

The general rule is that any income received by virtue of your vocation is taxable, irrespective of who gives it to you. YWAM used to have a blanket agreement with HMRC until 2005 when all blanket agreements were cancelled.

However, our agreement was not cancelled because it was unreasonable, but because HMRC no longer has blanket agreements. It is suggested that when you register you agree with the HMRC directly which income you receive needs to be declared as taxable income.

Alternatively, ask your accountant to do this on your behalf.

Taxable Income

1. Gifts from churches to a YWAMer, even if you haven’t carried out any work for them.

2. Gifts from churches to YWAM to cover staff fees of a YWAMer.

3. Gifts from trusts (i.e. SKI, Stewardship, CAF)

4. Honoraria received in return for performing duty (i.e. speaking in a DTS, church)

5. Reimbursements from YWAM for travel

6. Gifts from friends. Under the old blanket agreement the HMRC agreed to allow gifts from friends to be taxable at 50% (i.e. if you received £100, £50 would be taxable and £50 would be non-­‐taxable). However this agreement is no longer valid.

Under BIM62101 – Missionaries and evangelists: Income from vocation http://www.hmrc.gov.uk/manuals/bimmanual/BIM62101.htm the HMRC state: that personal gifts from parents or immediate friends are not considered taxable receipts. This may need defining with HMRC but at the very least you must keep records of all income, including donor, date and reason for gift.

7. Bank interest, dividends, rental income etc.

NON-­‐TAXABLE INCOME

1. Gifts from parents

2. Gifts from immediate friends (see above)

3. Personal testimonials, or personal gifts, for example on marriage or for medical treatment.

It has been understood in the past that regular gifts from friends that are given to assist you being a missionary are taxable but a one off gift for a specific purpose is not. However, it is your responsibility to establish this with HMRC directly (or via an accountant).

BUSINESS EXPENSES

You can make deductions from your taxable income to reduce your tax liability.

You can deduct any expenses which are incurred wholly and exclusively for the purpose of your work. In practice if an expense is incurred partly for business and partly for private purposes, then HMRC will allow you to claim a percentage of the expense as a deduction.

Here are some examples of business expenses

1. Travel expenses (but not to and from permanent place of work) 2. Outreach expenses 3. Telephone, stationary, photocopy, stamps YWAM HARPENDEN STAFF HANDBOOK (Edited April 2013) page 119