The Parish Treasurer's Manual

1.

Introduction

1.

Welcome

1

2.

Aims of the manual

1

3.

Limitations of the manual

1

4.

How to use the manual

2

5.

How to improve the manual

2

6.

Thank you!

2

2.

The Parish Treasurer

1.

Appointment of a Parish Treasurer

3

2.

Role of the Parish Treasurer

3

3.

Person specification for a Parish Treasurer

4

4.

Change of treasurer

5

5.

Responsibilities of the PCC

6

Status of the PCC

6

Rights and duties of the PCC

6

Functions of the PCC

7

3.

Responsibilities of the Parish Treasurer

1.

Record keeping

9

Cash book

9

Petty cash book

10

Bank statements and investment account statements

10

Supporting documentation

10

Gift Aid

10

Correspondence

10

Retention periods

11

2.

Routine expenditure

11

Ministry expenses / Parish Share

11

Clergy working expenses

11

Church running expenses

13

Visiting clergy, organists, cleaners

13

Charitable giving

13

3.

Cash collections

14

Alms at Holy Communion

14

Collections at institutions, inductions and confirmations

14

Collections at other services

14

Money placed in alms boxes

14

Gift Aid

15

Counting Sunday collections

15

Security

16

4.

Fees for occasional offices – baptisms, weddings and funerals etc.

16

5.

Banking arrangements

16

Mandate

16

Cheque signing arrangements

17

Opening accounts for organisations within the church

17

Bank statements and reconciliation

17

6.

Cash management

17

Cash payments

17

Cash float and imprest system

17

Balancing the petty cash

18

7.

Investments

18

CBF investments

18

Other investments

19

Investment income

20

8.

Insurance and risk management

20

Insurance

20

Insurance and events involving more than one parish

20

Risk management

20

9.

IT issues

21

IT systems

21

IT security

21

On-line banking

22

10.

Budgets and budgetary control

22

Annual budget

22

Periodic accounts

22

Forecasts

23

4.

Financial reporting

1.

What the PCC is accountable for

24

2.

Financial Statements

25

Trustees Annual Report

25

Fund accounting and reserves policy

29

Receipts and Payments Account

30

Statement of Financial Activities (SOFA)

33

Balance Sheet

38

Notes to the financial statements

40

Examples of financial statements

41

Moving from the Receipts and Payments basis to the SOFA basis

42

Timescale for completion, circulation & publication of accounts

42

3.

Independent Examination or Audit

42

Criteria for deciding between independent examination and audit

42

PCCs with an annual income of over £250,000 but below £500,000

43

PCCs with an annual income of £500,000 or more

43

Independent examination and audit compared

43

Appointment of Independent Examiner or Auditor

44

4.

Statistical Returns

45

Statistics for Mission

45

Annual Return of Parish Finance

45

5.

Diocesan services available to Parish Treasurers

1.

Parish Loans

46

2.

NatWest cash management scheme

46

3.

Payroll service

47

6.

Taxation

1.

VAT

48

VAT categories

48

Output tax and registration

48

VAT relief available to the PCC via zero-rating and reduced standard rating

49

Maintenance of listed places of worship

52

2.

Income Tax

53

Avoiding tax on income

53

Recovery of income tax on investment income and trust income

53

Recovery of tax on Gift Aid donations

54

3.

Income Tax and National Insurance contributions for staff

55

4.

Tax and the clergy

57

7.

Funding sources

1.

Tax efficient giving

59

Gift Aid

59

Deeds of covenant

60

Gifts of investments and property in kind

60

Payroll giving

60

Assets donated by companies

61

Legacies

61

2.

Grants and loans

61

The Church and Community Fund

61

Parish loans from the Diocese

61

Grants and loans from the Diocese for new building projects

62

3.

Legacies

62

4.

Fundraising events

62

8.

Parish Share

1.

Introduction

63

2.

Allocation to deaneries

63

Basic allocation of Parish Share

63

Ministry cost adjustment

63

Total Share allocation for the Diocese

64

Final Share calculation and floor and ceiling

65

3.

Allocation to parishes

65

4.

Payment of Parish Share

66

Payment methods

66

Rebate scheme

66

Annual report on Share payments

66

9.

Helpful contacts at the Diocese