Parochial Clergy
Under arrangements agreed
with HM Revenue & Customs (the Revenue), part of your stipend
may be paid free of tax and national insurance in reimbursement of
heating, lighting, cleaning and garden upkeep costs
(HLC). The following conditions
must be met:
You must
occupy, rent-free, an official house provided by the Church of
England (or a charity) for duties which are
full-time;
You must have incurred the costs only on heating, lighting,
cleaning or garden upkeep in those parts of the property which are
used for official purposes and/or occupied by you or your
family;
You must receive eligible funds (i.e. non-statutory grants) paid
through this office;
You must complete a Return of Expenditure annually. (If no Return
is received by September, any existing tax-free payments have to
cease. If no Return is received by the following March, any relief
for that year is lost entirely.)
The reimbursement of these
expenses is not a payment in addition to your stipend. It is simply
a reclassification of part of your stipend as tax-free rather than
taxable.
How the Scheme works
When you take up a new
appointment, we seek a reasonable estimate of the costs at your
official house; we can then make provisional tax-free payments on
that basis.
Once you know your actual expenditure and enter it on a Return
which we send you during the next financial year, we then make an
appropriate adjustment for any under or over
reimbursement. In practice, an under-reimbursement is adjusted
immediately, whilst an over reimbursement is corrected by switching
the amount due from the tax-free to the taxable element of your
stipend in equal monthly instalments over the remaining payments of
the tax year. This procedure means that your tax-free
payments may fluctuate whilst the adjustment is being
made.
If for any reason, we are
unable to reimburse part or all of your costs, you should write to
the Revenue to request a "study allowance" (normally only one
quarter of your under-reimbursed costs).
Deaconesses and Licensed Layorkers
Unfortunately, the arrangements
described above can not apply automatically to deaconesses and
licensed layworkers. In some cases, full reimbursement (as for the
clergy) is permitted, whilst in others only a reduced rate of
reimbursement (amounting to 25% of the total claim) is payable. In
each case, the Revenue must consider the relationship of
duties to the particular accommodation. They then advise us of
their decision, so that we can implement either full reimbursement
or reduced reimbursement as appropriate.
Scheme Rules
A copy of the full Rules relating
to this scheme is available from us on request.