The Archdeacons have issued updated guidance on collections at funerals, particularly in the light of concerns over developing practices across the country.
It is not good pastoral practice for churches to have collections at funerals for church purposes, even having a plate at the back for a retiring collection. The new fee is intended to cover all costs associated with holding the service in church, and to ask for additional finance is inappropriate. (Neither the Book of Common Prayer 1662 nor Common Worship: Pastoral Services provide for a collection to be taken at a funeral service.)
If the family or the Funeral Director ask that there should be a collection (a plate or basket at the back, or envelopes in the pews) then the purpose of the collection should be stated clearly in the service order, or by whoever is leading the service.
Collections should always be for bona fide charitable organisations. It will usually be the Funeral Director who is responsible for ensuring the monies are properly accounted for and forwarded to the relevant charity/ies. Even where arrangements are made with the church, and these monies are managed by the treasurer, they should be accounted for separately and not declared through the annual accounts (except for any monies that the family have specifically required to be used for church purposes).
Further information on this issue may be found in legal advice on the Church Commissioners website: http://www.churchofengland.org/media/1564108/collections