Paying people in the forum Information for forums about paying people including staff, self-employed and volunteer expenses. When forums are starting up people usually give their time as an unpaid volunteer. Over time as the work builds up, it’s not unusual for the forum steering group to start to think about whether they need paid roles to help manage the workload. Not all forums end up paying people to carry out different roles. Some parent carer forums share the workload using solely unpaid volunteers. If your forum decides that it needs paid roles, there are a number of things to consider. This guidance aims to help forums think things through to make sure they’re keeping within the law and HMRC rules before committing to any contracts. Creating paid roles in your forum Running a parent carer forum involves a lot of work. It’s not unusual for forums who’ve been running for a while with only unpaid volunteers to start to look at how they can create new paid roles. It may be that some members of the forum steering group are putting in a considerable amount of time supporting the work of the forum. Reviewing who does what and sharing the workload among steering group members can be one way of handling the pressure. The time needed for certain areas of work may be so great that it’s not sustainable. Parents representing the forum on strategic working groups can find themselves working for considerable amounts of time in an unpaid capacity alongside paid professionals doing similar work on high salaries. Other parent carers might find themselves spending a large amount of their time carrying out administrative tasks running the forum or organising forum events. It is not reasonable to expect people to contribute a huge amount of time and expertise for no financial reward. It is important that as a forum you take time to consider which roles someone in a voluntary, unpaid capacity can reasonably carry out and which roles to pay. You should also look at reasonable rates of pay. You can ask other forums what rates they pay for different types of work such as forum co-ordination and administration as well as for work on strategic groups. See more about manging staff. What forums need to consider before making decisions to take on paid roles The forums legal structure. Conflicts of interest. What you can and can’t pay volunteers. One off payments, honorariums and vouchers. Paying people over and above out of pocket expenses. Implications for Benefits claimants. Acceptable ways of rewarding and recognising the contribution of volunteers. Can you pay parent carers to attend steering group meetings? Creating paid roles. Deciding on the employment status of roles for tax and NIC. National minimum wage The National Minimum Wage and Living Wage: Who gets the minimum wage – GOV.UK Conflicts of interest When making decisions about which roles to pay, it’s important that steering group members consider any conflicts of interest. They should also carefully manage decision making about paying people, including rates of pay. For example, someone who’d like to be in a paid role shouldn’t be part of discussions or decision-making about this. This would be a conflict of interest. If you are an unincorporated association and make decisions to pay one or two people on the steering group for some of the work, this could impact the future if you decide to adopt some types of legal structures. An example could be if you pay steering group members for some work and then decided to become a charity. (Charity trustees generally cannot be in a paid role as well.) It can make for some difficult conversations between steering group members accustomed to being in a paid role if you suddenly change your structure and how you do things. Forums need to take time to think it through. These conversations can be difficult for people who have put a lot of work into getting the forum up and running, the day-to-day work of the forum and strategic work. But it’s important to make these kinds of decisions impartially and focussing on the best interests of the forum. If steering group members are making decisions about paying themselves, then this is a conflict of interest. Seek support from Community Matters, National Council for Voluntary Organisations or a similar local organisation before making any decisions. Considerations for different legal structures when paying people All forums need to consider their legal structure when they consider paying people for piece of work. The structure your forum has adopted is likely to impact on the arrangements for paying people. Below there is a brief overview of some of the implications for different structures. We recommend you get additional advice before you start paying people. Constituted groups and unincorporated associations If the forum is an unincorporated association, then it is not recognised as a legal entity in its own right, like a company would be. This means that a forum steering group member would need to take on the responsibility of employing someone or hiring a consultant to do pieces of work as self-employed. This person would be legally responsible for ensuring the forum is following employment law. When forums start to think about paying people for their time, they usually also consider their legal status and adopt a legal structure such as Community Interest Company, Charitable Incorporated organisation or a registered charity. See the section on legal structures. Registered Charities and Charitable Incorporated Organisations When you become a trustee, you volunteer your time and expertise and usually won’t receive payment for your work. Trustees can usually receive expenses for out-of-pocket payments to carry out their role. Examples include: Travel to and from meetings. Childcare or care of other dependants while attending meetings. Overnight accommodation. Postage, telephone calls and broadband time for charity work. A charity should have a written agreement setting out what it classes as an expense, plus how to claim and approve expenses. As a general rule a charity cannot pay their trustees for simply being a trustee. Some charities do pay their trustees for work undertaken. But they can only do so because it’s allowed by their governing document, by the Charity Commission or by the courts. There are also rules about paying someone who is connected to a trustee, known as a ‘connected person’. For example: A spouse or partner. Siblings. A brother- or sister-in-law. Parents. Business partner. Businesses connected to trustees. For more information visit the guidance on “Payments to charity trustees: what the rules are” provided by the Charities Commission. Community Interest Companies (CICs) CICs can pay directors, depending on their memorandum and articles of association (the governing documents registered with Companies House). As far as CICs are concerned, the key points to remember if paying directors are: Directors can receive remuneration (which includes a salary) for their services to a CIC. CIC directors’ remuneration should never be more than is reasonable. CIC directors’ remuneration arrangements should always be transparent. The regulator – or the members of a CIC – may take action if a CIC director’s remuneration appears to be too high. Reporting the directors renumeration is a requirement as part of the annual report If the remuneration is disproportionate or set at such a high level that the company will have problems sustaining itself, the regulator may have concerns. Further guidance can be found here. If the directors are also members of the forum steering group, you will also need to consider the information below in the section ‘Can forums pay parent carers to attend steering group meetings?’ Determining employment status for tax when you’re paying people The forum is legally responsible for making the decision about whether to determine each paid role employed or self-employed. The employment status can also be different for tax purposes. Refer to the Employment status: Overview (www.gov.uk) document for more information. HM Revenue and Customs – table showing personal tax allowances: www.hmrc.gov.uk/rates/it.htm. HMRC have developed an online checker tool to help determine employment status for tax: Check employment status for tax -(www.gov.uk) Forum’s should use this tool and keep records of the results. This tool will take you through a series of questions and come up with three options: Employed. Self Employed. Undetermined. If the answers to your question take you to the undetermined category, you can use their phone line to talk through the role to see what their view is. You can get in touch with Community Matters to request help to work through the HMRC tool and to make sure you give the right answers to the questions in the tool, as well as to help you with any follow up work. Video: Remuneration and employing people for forums A word of caution If the forum didn’t deduct tax and NI contributions as it should have done, the Inland Revenue would hold the forum responsible. This could result in: Fines from HMRC. Fines for employing illegal workers. Claims from people asserting their employment rights. Reputational damage to the forum. Volunteers Volunteers give their time free of charge to help support the organisation. It is good practice to reimburse their actual out-of-pocket expenses, either incurred through carrying out the voluntary role or expenses that enable them to carry out the role. Parent carer forums that pay or reimburse volunteers for out-of-pocket expenses should have a proper system in place for recording and reimbursing expenses, such as an expenses claim for with an authorisation process. You should have a remuneration and expenses policy to outline the rates you can pay. See more information on managing volunteers. What you can pay volunteers You should only pay or reimburse actual expenses at a ‘reasonable’ level. What is reasonable depends on the circumstances. You can pay or reimburse volunteers for the following types of expenses: Food and drink consumed while volunteering (subsistence). Travel to and from the place of volunteering. Travel undertaken in the course of volunteering. Care of dependents while volunteering. Equipment or protective clothing needed to carry out the role. Sundries like phone calls, postage, stationery, a contribution to someone’s broadband if they’re doing a lot of work for the forum etc. HMRC set rates for travel and subsistence costs that aren’t subject to tax or NIC. If you use these, HMRC should accept that the payment or reimbursement is ‘reasonable’. HMRC have set rates for out-of-pocket expenses that aren’t subject to tax or NIC. You can find the rates using the links below: Food and drink rates: EIM30240 – Exemption for amounts which would otherwise be deductible: payments at a benchmark rate Further information about subsistence rates can be found here. Travel expenses rates: Advisory fuel rates – GOV.UK (www.gov.uk) Paying only out of pocket expenses at a reasonable rate shouldn’t affect any benefits. It is important to agree as a group what expenses will be paid and the rate of pay. There is an example expenses policy in the policies and procedures section. Paying over and above out of pocket expenses for volunteers If you pay anything more than out-of-pocket expenses at a ‘reasonable’ rate, you may inadvertently create an employment situation where the volunteer becomes an employee. You will then need to deal with income tax or national insurance contributions and have to use PAYE (Pay as you Earn) and report payments to HMRC. If a volunteer gets any other payment, reward or benefit in kind, they may be classed as an employee or self employed rather than a volunteer. This includes any promise of a contract or paid work in the future. Being classed as an employee or worker gives people certain rights. This could then result in: Successful backdated claims for a minimum wage. Successful claims for unfair dismissal or for discrimination. Backdated claims by Revenue and Customs for unpaid income tax and national insurance. The payment to the “volunteer” is treated as ‘net’ for these purposes. This could also impact on any benefits they receive What you should avoid giving/paying volunteers The items below as these will all be subject to tax and NIC. If the item was subject to tax and NIC, the forum would need to make a decision about whether each role is employed or self-employed. See below for more information about this. Pocket money’ not connected to actual out-of-pocket expenses. Sessional fees. Honoraria. One-off payments and honorariums are treated as income and liable for tax and NIC. Lump sums or other payments to cover “expenses” that are not in line with the rules for out-of-pocket expenses. Regular perks such as free items in return for volunteering Forums also need to be aware of specific circumstances and the impact this could have on parent carers who are claiming benefits. Rules around vouchers Vouchers for goods or services such as supermarkets could be classed as income for the benefits agency and HMRC. Forums cannot use the Department for Education participation grant to fund any gifts to individuals over the value of £25, for example flowers or vouchers to a parent carer leaving the forum. Impact of paying people in receipt of benefits Any money earned over and above out of pocket expenses may affect any income related benefits that people receive. Parent carers on benefits must inform the Department for Work and Pensions (DWP) of any income they are receiving. Earnings might also affect benefits claimed from the local authority such as Housing and Council Tax Benefits. It is not possible to write simple guidance on how much a parent carer could earn before affecting their benefits. It is very much dependant on the individual’s financial situation. Parent carers should seek advice before considering receiving payment, by money or by voucher. They can call the Contact freephone helpline who will be able to tell them if their benefits would be affected if they are paid, and how much they can earn without affecting their other benefits and entitlements. They can also contact Citizens Advice, who have a national number which can connect people to their local Adviceline 0800 144 8848. Further information from Citizen’s Advice can be found here. Acceptable ways of recognising and valuing volunteers You can show your gratitude to volunteers for the work they do and contribution they make to the forum by: Rewarding volunteers as a group (e.g. by paying for outings, parties or ceremonies) is allowed as long as the cost is reasonable in proportion to the organisation’s total income and the scale of the contribution to its work made by the volunteers. Making small in-kind gifts to individual volunteers, such as a “thank you” (e.g. tickets to events, flowers, chocolates), is permitted. This is only as long as the cost is reasonable in proportion to the organisation’s total income and to the volunteer’s contribution to the organisation’s work. Please note the maximum allowed from the DFE grant for gifts of any kind is £25. Handwritten thank you notes. Feature volunteers in your newsletter or social media. Offer volunteers breakfast/lunch when they’re volunteering for you. Organise volunteer support sessions with refreshments provided. Help volunteers to think about their career, next steps and provide relevant experience and references. Can forums pay parent carers to attend steering group meetings? Some forums want to recognise and reward the work of parent carers for being part of the steering group and attending steering group meetings. This isn’t good practice. And if the Charity Commission decided that the forum is a charity with charitable purposes, these kinds of payments would not be permitted. This is aside from exceptional circumstances the Charities Act 2006 sets out. The Charities Act 2006 The principles of voluntary trusteeship, and that trustees must not benefit from that trust, underpin charity law. Charity law ensures that trustees act in the best interests of fulfilling the charitable purposes, rather than from self-interest. There are, however, a limited number of circumstances in which charity trustees may receive payment from the charity for acting as a trustee. These must be expressly permitted within the governing document of the charity, by statute, by prior permission of the Charity Commission, or the Courts. The Act further outlines the conditions that are to be met before any trustee or connected person is entitled to receive remuneration for services rendered. Those conditions are: The amount, or maximum amount, to be paid in relation to the service to be provided should be set out in writing between the trustees, or the charity, and the relevant person. Such amounts should not exceed what is reasonable. The trustees should be satisfied that such an action is in the best interests of the charity. The total number of trustees (and connected persons) receiving a payment from the charity is a minority of the total trustee body; and iv) the charity’s governing document must not contain any provisions that expressly prohibit the payment of trustees. Other payments still requiring express legal authority include: Payment for a separate post within a charity, for example as a session youth worker or as chief executive. Payment for being a truste. Honoraria and other token payments in excess of £1000, even though they do not reflect the true value of a trustee’s input. There are strict rules that charities must follow when making decisions about paying a charity trustee. It’s important to look at the rules and seek advice, even if you think you’re not a charity. You can use Community Matters or similar organisations to find out more. Your governing document must also allow for the payment of steering group members/trustees. For HMRC, any office holder who is paid for their role should be paid via payroll. If their earnings fall above the set levels then they would be liable for NIC and tax on their income. Further information has been provided by the Charities Committee in the guidance “Payments to charity trustees: what the rules are.” Do you have any thoughts about this page? Visit our How to feedback page to share them. Looking for something else? You can find a full list of pages on our Parent carer forum handbook contents page. Find out more about paying people in forums Setting up and running payroll with community matters Click here to watch this video on our YouTube channel Find out more Employer responsibilities Click here to watch this video on our YouTube channel Find out more Staffing and workforce development getting your HR right Click here to watch this video on our YouTube channel Find out more Small forums and contracts Click here to watch this video on our YouTube channel Find out more Deciding on a structure Find out more about different forum structures Deciding on a structure Community Matters Find out about support from Community Matters Community Matters ShareCopy URLCopied!Share via EmailShare via FacebookShare via TwitterShare via WhatsAppShare via LinkedIn
What forums need to consider before making decisions to take on paid roles The forums legal structure. Conflicts of interest. What you can and can’t pay volunteers. One off payments, honorariums and vouchers. Paying people over and above out of pocket expenses. Implications for Benefits claimants. Acceptable ways of rewarding and recognising the contribution of volunteers. Can you pay parent carers to attend steering group meetings? Creating paid roles. Deciding on the employment status of roles for tax and NIC. National minimum wage The National Minimum Wage and Living Wage: Who gets the minimum wage – GOV.UK
What forums need to consider before making decisions to take on paid roles The forums legal structure. Conflicts of interest. What you can and can’t pay volunteers. One off payments, honorariums and vouchers. Paying people over and above out of pocket expenses. Implications for Benefits claimants. Acceptable ways of rewarding and recognising the contribution of volunteers. Can you pay parent carers to attend steering group meetings? Creating paid roles. Deciding on the employment status of roles for tax and NIC. National minimum wage The National Minimum Wage and Living Wage: Who gets the minimum wage – GOV.UK
Constituted groups and unincorporated associations If the forum is an unincorporated association, then it is not recognised as a legal entity in its own right, like a company would be. This means that a forum steering group member would need to take on the responsibility of employing someone or hiring a consultant to do pieces of work as self-employed. This person would be legally responsible for ensuring the forum is following employment law. When forums start to think about paying people for their time, they usually also consider their legal status and adopt a legal structure such as Community Interest Company, Charitable Incorporated organisation or a registered charity. See the section on legal structures.
Constituted groups and unincorporated associations If the forum is an unincorporated association, then it is not recognised as a legal entity in its own right, like a company would be. This means that a forum steering group member would need to take on the responsibility of employing someone or hiring a consultant to do pieces of work as self-employed. This person would be legally responsible for ensuring the forum is following employment law. When forums start to think about paying people for their time, they usually also consider their legal status and adopt a legal structure such as Community Interest Company, Charitable Incorporated organisation or a registered charity. See the section on legal structures.
Registered Charities and Charitable Incorporated Organisations When you become a trustee, you volunteer your time and expertise and usually won’t receive payment for your work. Trustees can usually receive expenses for out-of-pocket payments to carry out their role. Examples include: Travel to and from meetings. Childcare or care of other dependants while attending meetings. Overnight accommodation. Postage, telephone calls and broadband time for charity work. A charity should have a written agreement setting out what it classes as an expense, plus how to claim and approve expenses. As a general rule a charity cannot pay their trustees for simply being a trustee. Some charities do pay their trustees for work undertaken. But they can only do so because it’s allowed by their governing document, by the Charity Commission or by the courts. There are also rules about paying someone who is connected to a trustee, known as a ‘connected person’. For example: A spouse or partner. Siblings. A brother- or sister-in-law. Parents. Business partner. Businesses connected to trustees. For more information visit the guidance on “Payments to charity trustees: what the rules are” provided by the Charities Commission.
Registered Charities and Charitable Incorporated Organisations When you become a trustee, you volunteer your time and expertise and usually won’t receive payment for your work. Trustees can usually receive expenses for out-of-pocket payments to carry out their role. Examples include: Travel to and from meetings. Childcare or care of other dependants while attending meetings. Overnight accommodation. Postage, telephone calls and broadband time for charity work. A charity should have a written agreement setting out what it classes as an expense, plus how to claim and approve expenses. As a general rule a charity cannot pay their trustees for simply being a trustee. Some charities do pay their trustees for work undertaken. But they can only do so because it’s allowed by their governing document, by the Charity Commission or by the courts. There are also rules about paying someone who is connected to a trustee, known as a ‘connected person’. For example: A spouse or partner. Siblings. A brother- or sister-in-law. Parents. Business partner. Businesses connected to trustees. For more information visit the guidance on “Payments to charity trustees: what the rules are” provided by the Charities Commission.
Community Interest Companies (CICs) CICs can pay directors, depending on their memorandum and articles of association (the governing documents registered with Companies House). As far as CICs are concerned, the key points to remember if paying directors are: Directors can receive remuneration (which includes a salary) for their services to a CIC. CIC directors’ remuneration should never be more than is reasonable. CIC directors’ remuneration arrangements should always be transparent. The regulator – or the members of a CIC – may take action if a CIC director’s remuneration appears to be too high. Reporting the directors renumeration is a requirement as part of the annual report If the remuneration is disproportionate or set at such a high level that the company will have problems sustaining itself, the regulator may have concerns. Further guidance can be found here. If the directors are also members of the forum steering group, you will also need to consider the information below in the section ‘Can forums pay parent carers to attend steering group meetings?’
Community Interest Companies (CICs) CICs can pay directors, depending on their memorandum and articles of association (the governing documents registered with Companies House). As far as CICs are concerned, the key points to remember if paying directors are: Directors can receive remuneration (which includes a salary) for their services to a CIC. CIC directors’ remuneration should never be more than is reasonable. CIC directors’ remuneration arrangements should always be transparent. The regulator – or the members of a CIC – may take action if a CIC director’s remuneration appears to be too high. Reporting the directors renumeration is a requirement as part of the annual report If the remuneration is disproportionate or set at such a high level that the company will have problems sustaining itself, the regulator may have concerns. Further guidance can be found here. If the directors are also members of the forum steering group, you will also need to consider the information below in the section ‘Can forums pay parent carers to attend steering group meetings?’
Rules around vouchers Vouchers for goods or services such as supermarkets could be classed as income for the benefits agency and HMRC. Forums cannot use the Department for Education participation grant to fund any gifts to individuals over the value of £25, for example flowers or vouchers to a parent carer leaving the forum.
Rules around vouchers Vouchers for goods or services such as supermarkets could be classed as income for the benefits agency and HMRC. Forums cannot use the Department for Education participation grant to fund any gifts to individuals over the value of £25, for example flowers or vouchers to a parent carer leaving the forum.
Impact of paying people in receipt of benefits Any money earned over and above out of pocket expenses may affect any income related benefits that people receive. Parent carers on benefits must inform the Department for Work and Pensions (DWP) of any income they are receiving. Earnings might also affect benefits claimed from the local authority such as Housing and Council Tax Benefits. It is not possible to write simple guidance on how much a parent carer could earn before affecting their benefits. It is very much dependant on the individual’s financial situation. Parent carers should seek advice before considering receiving payment, by money or by voucher. They can call the Contact freephone helpline who will be able to tell them if their benefits would be affected if they are paid, and how much they can earn without affecting their other benefits and entitlements. They can also contact Citizens Advice, who have a national number which can connect people to their local Adviceline 0800 144 8848. Further information from Citizen’s Advice can be found here.
Impact of paying people in receipt of benefits Any money earned over and above out of pocket expenses may affect any income related benefits that people receive. Parent carers on benefits must inform the Department for Work and Pensions (DWP) of any income they are receiving. Earnings might also affect benefits claimed from the local authority such as Housing and Council Tax Benefits. It is not possible to write simple guidance on how much a parent carer could earn before affecting their benefits. It is very much dependant on the individual’s financial situation. Parent carers should seek advice before considering receiving payment, by money or by voucher. They can call the Contact freephone helpline who will be able to tell them if their benefits would be affected if they are paid, and how much they can earn without affecting their other benefits and entitlements. They can also contact Citizens Advice, who have a national number which can connect people to their local Adviceline 0800 144 8848. Further information from Citizen’s Advice can be found here.
The Charities Act 2006 The principles of voluntary trusteeship, and that trustees must not benefit from that trust, underpin charity law. Charity law ensures that trustees act in the best interests of fulfilling the charitable purposes, rather than from self-interest. There are, however, a limited number of circumstances in which charity trustees may receive payment from the charity for acting as a trustee. These must be expressly permitted within the governing document of the charity, by statute, by prior permission of the Charity Commission, or the Courts. The Act further outlines the conditions that are to be met before any trustee or connected person is entitled to receive remuneration for services rendered. Those conditions are: The amount, or maximum amount, to be paid in relation to the service to be provided should be set out in writing between the trustees, or the charity, and the relevant person. Such amounts should not exceed what is reasonable. The trustees should be satisfied that such an action is in the best interests of the charity. The total number of trustees (and connected persons) receiving a payment from the charity is a minority of the total trustee body; and iv) the charity’s governing document must not contain any provisions that expressly prohibit the payment of trustees. Other payments still requiring express legal authority include: Payment for a separate post within a charity, for example as a session youth worker or as chief executive. Payment for being a truste. Honoraria and other token payments in excess of £1000, even though they do not reflect the true value of a trustee’s input.
The Charities Act 2006 The principles of voluntary trusteeship, and that trustees must not benefit from that trust, underpin charity law. Charity law ensures that trustees act in the best interests of fulfilling the charitable purposes, rather than from self-interest. There are, however, a limited number of circumstances in which charity trustees may receive payment from the charity for acting as a trustee. These must be expressly permitted within the governing document of the charity, by statute, by prior permission of the Charity Commission, or the Courts. The Act further outlines the conditions that are to be met before any trustee or connected person is entitled to receive remuneration for services rendered. Those conditions are: The amount, or maximum amount, to be paid in relation to the service to be provided should be set out in writing between the trustees, or the charity, and the relevant person. Such amounts should not exceed what is reasonable. The trustees should be satisfied that such an action is in the best interests of the charity. The total number of trustees (and connected persons) receiving a payment from the charity is a minority of the total trustee body; and iv) the charity’s governing document must not contain any provisions that expressly prohibit the payment of trustees. Other payments still requiring express legal authority include: Payment for a separate post within a charity, for example as a session youth worker or as chief executive. Payment for being a truste. Honoraria and other token payments in excess of £1000, even though they do not reflect the true value of a trustee’s input.
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