Guide to PAYE and NIC

Making It Easier > Processes > Governance/Regulation > PAYE & NIC

Many PCCs are employers. The guidance provided here will help you discover the actions you need to take

Does the PCC need to run PAYE?
From 6 April 2013 the special arrangement that HMRC had with all churches (Local Religious Centres - LRCs) changed significantly.

A church must now register as an employer with HMRC and operate a PAYE (Pay As You Earn) Scheme if any of the following apply,
  • they pay an employee at or above the PAYE or NI Lower Earnings Limit,
  • they employ anyone who already has another job,
  • they employ anyone who is receiving a state, company, or occupational pension,
  • they provide an employee with employee benefits.
It is the responsibility of the PCC to establish whether they are required to register as an employer and thus report PAYE. The level or frequency of any payment(s) is not relevant.

Once a church has registered as an employer, all payments to all employees - regardless of amount or payment frequency - must be reported to HMRC through their PAYE system.

Churches that do not need to operate PAYE, but do employ people on a regular or occasional basis, need to retain records of each employee's,
  • name, address and NI number,
  • total amount paid over tax year.
These records must be kept for the next 3 full tax years.

HMRC's guidance is accessible from the page link below.

LRC Guidance
Briefing the PCC
The following briefing paper is intended to inform Parochial Church Councils of the issues relating to paying employees and their responsibilties for ensuring the correct application of HMRC guidance.

Briefing Paper
PCC Employee or Self-employed?
Individuals who receive money from a parish church for any reason other than the reimbursement of allowable expenses, may be an employee of the PCC. For example, organists, vergers, sextons and cleaners are often PCC employees. The only exception to this are clergy (including retired clergy) who are 'Office Holders', rather than employees.

Such 'money' would include any honorarium, regular, irregular, or one-off payments.

If an individual is not already registered with HMRC as self-employed, then HMRC's anonymous Employment Status Indicator (ESI) should be used to verify the person's employment status with the PCC.

PAYE Software
In order for PAYE software to operate effectively it must be able to correctly connect to HMRC over the Internet.  Using the link below will provide a list of software that has been tested by HMRC.  All the software listed should be free to use if you have 9 or less employees.

PAYE Software


Useful Contacts

If you would like to discuss the issues raised by this page then please contact either:

Gordon Fath
Resources Officer
0151 705 2180
Sharon Townson
Human Resources Adviser
0151 709 9722

Real Time Information (RTI)

All UK employers are required to notify HMRC of any payments made to their employees at the time they pay them.  This notification is being referred to as Real Time Information, or RTI.  A guide for churches can be found on the Parish Resources website and more detailed information is also published on HMRC's own website.

PAYE Church Guide