https://wiki.changeringing.co.uk/api.php?action=feedcontributions&user=MatildaHarris&feedformat=atomChangeringing Wiki - User contributions [en-gb]2024-03-29T16:00:44ZUser contributionsMediaWiki 1.34.0https://wiki.changeringing.co.uk/index.php?title=Income_Tax_and_Wedding_Fees&diff=1534Income Tax and Wedding Fees2011-11-14T11:30:35Z<p>MatildaHarris: </p>
<hr />
<div>__NOTOC__<br />
===Those Wedding Fees===<br />
<br />
Just in case you’re wondering why I’m writing this, I’d better explain that as well as being a ringer<br />
I’m also a money person. I used to be one of the Central Council’s Independent Examiners - what most people<br />
call, Auditors - and I do a lot of work with ringing and church accounts too. Professionally I also used to be a<br />
rather senior Inspector of Taxes. So it’s not surprising that among the purely ringing questions people send me,<br />
I also get a fair few money questions. And it’s those questions that this series is all about.<br />
<br />
'''''I’ve just read a most disturbing article about the burgeoning mountain of middle class crime, and I fear I am myself a pebble in that mountain. It’s four years since I started ringing for weddings, yet in all that time I haven’t declared a single wedding fee on my tax return. Small stabs of guilt are niggling me, so if you can give me absolution - or, better still, justification - I’d be really grateful.''''' SW - West Midlands<br />
<br />
By great good fortune I can give you both. But since, by your own admission, you’re middle class,<br />
middle aged and - I suspect - a middle brow ringer to boot, you won’t just want an answer, you’ll want an<br />
explanation to go with it.<br />
<br />
===The System===<br />
<br />
So beginning at the beginning, in this country, tax - thank the Lord - is purely a matter of law. There<br />
are no bribes and [http://www.ghengisfireworks.co.uk/ fireworks] no extortion, and nothing you receive is taxable unless the law says it is.<br />
But good though that is, tax law is unfortunately fantastically complex. The statutes themselves amount<br />
to several thousand <span class="plainlinks">[http://www.netlook.com.br/ <span style="color:black;font-weight:normal; text-decoration:none!important; background:none!important; text-decoration:none;">vestidos da moda</span>] pages, whilst the judicial interpretation of all those pages fills dozens of stout volumes.<br />
So if anyone tells you that your question is a simple one, don’t believe them.<br />
<br />
That said, it could be worse, because in a mere page or so, the law sets out a handful of categories that<br />
a chunk of income must fall into if it’s to be taxable. And that’s because not all income is taxable. Gifts aren’t,<br />
for example, nor are betting wins or the money you get for your old car when you buy a new one.<br />
So we have to look at each taxing category in turn and see if wedding fees fall into it.<br />
It’s rather like doing one of those Sunday newspaper puzzles. You ask yourself one question after another and keep ruling things out.<br />
"Is a wedding fee income from property?" No. "Is it interest on money?" No. "Is it a dividend from an overseas company?" No.<br />
<br />
No trouble with any of those. They’re simple questions with simple answers and most of the other<br />
questions are just as simple. But when you’ve eliminated all the simple ones, there are four questions left that<br />
need Employment?<br />
<br />
So first, are your wedding fees income from an employment? Are you in some way employed as a bell<br />
ringer? And you ask yourself that question because, as I’m sure you know, for tax purposes almost all earned<br />
income is divided into two categories: income from employment - often known as Pay as You Earn - and<br />
income from sell-employment - often known as Pay as You Please. And once you’ve asked that question, it<br />
won’t take you a moment to reply, “Of course I’m not employed as a bell ringer.” No ordinary ringer is. There is<br />
no contract of employment and nor are there any features of the arrangement which could lead anyone to think<br />
that an employer/employee relationship exists. Judges have spent a vast amount of time considering what might<br />
or might not be considered an employment, but they’d take one look at this situation and say the answer’s just<br />
plain obvious.<br />
<br />
Of course, if you were employed as something else - a cathedral verger, say - and you had to ring for<br />
weddings as part of your duties, your fees would be taxable, but that’s getting decidedly theoretical.<br />
<br />
===An Office Holder?===<br />
<br />
More obscurely, Schedule E - which is what the employment bit of tax law is technically called - also<br />
applies to people who hold an “Office” and who get income from that “Office”. And I say “obscurely” because<br />
no one’s entirely sure what an “Office” is. By and large, “Offices” are likely to be long-standing and vaguely<br />
prestigious posts, or posts that exist under some form of written constitution - the sort of posts that seem to<br />
exist whether someone fills them or not. The Master of the Queen’s Horse, for example,<br />
or the Lord Lieutenant of the County, or the Ringing Master of an Association Closer to the mark, vicars were<br />
always considered to hold an office - although there’s some doubt about that now - and church organists were looked<br />
on similarly. So might ringers also be considered to be office holders?<br />
<br />
Well, almost certainly not. In most churches the local band is a vague kind of thing. It has no fixed<br />
size, no terms of appointment and no written or centuries-old constitution. Any tax inspector who tried to pin an<br />
office on you would be quickly told to spend their time looking at something more sensible.<br />
Just possibly - and I’m speaking entirely theoretically here - it could be suggested that one or two tower<br />
captains hold an office. If so, their wedding fees would be taxable while the rest of the band’s wouldn’t be. But<br />
that would be such a bizarre situation that no sensible tax inspector would try to suggest it. So on Schedule E<br />
grounds, you’re safe.<br />
<br />
===Self-Employed?===<br />
<br />
But could you be self-employed? Could you have the trade or profession of “bell ringer”? Well, nothing in the<br />
statutes says what a trade or profession is, and judges have spent a really huge amount of time over the past 100<br />
years considering exactly that - normally when someone’s made a very large sum of money by buying and selling<br />
something. Boiled right down, the test is whether you have arranged your affairs with the primary aim of making money,<br />
or whether such money as you receive is just incidental to your private life or hobby. Quite clearly, wedding fees<br />
fall in the latter category.<br />
<br />
But if we’re just supposing, it’s possible that someone could organise themselves to ring at five<br />
weddings every Saturday at £20 a time solely because they wanted the money, and it could then be suggested<br />
that such a person was in trade. A tax inspector would have a distinctly uphill task trying to prove it, though.<br />
<br />
===Case VI===<br />
<br />
And you might think that that would be that, but unfortunately there’s also a small “catch everything<br />
else” section called Case VI of Schedule D. It claims to tax, “... any annual profits or gains not falling under<br />
any other Case of Schedule D and not charged by virtue of Schedule A or Schedule E ...“<br />
And at first sight that looks like it could be a tricky one because surely a wedding fee must be some<br />
kind of “profit or gain.” Well, you might think so, but while tax inspectors are rather fond of catch all<br />
legislation, judges certainly aren’t, and over the years they’ve come to the rescue in severely limiting what Case VI<br />
can catch. So first, only money received under an enforceable contract is taxable under Case VI, and<br />
although contracts can be oral as well as written, it would be very difficult indeed to suggest that wedding<br />
ringers have entered into a contract.<br />
<br />
For a start, it would be hard to pin down who the contract could be with - the church? The vicar? the<br />
bride’s father? the best man? The tower captain? And secondly, the arrangements are so vague as to who rings,<br />
when they ring and what they ring, that an enforceable contract could hardly be considered to exist.<br />
Of course, lawyers are always happy to assert remote possibilities with each other, and I dare say that<br />
at this very moment ringing lawyers all over the country are itching to put pen to paper with a counter view. But<br />
tax inspectors are practical people not vague theorists, and they would readily agree that no contract exists.<br />
And second, even if a contract did exist, you could still claim to set your expenses against the fees<br />
received. Those expenses wouldn’t include your costs of going to practice nights or buying ringing books or<br />
anything like that, but they would include travelling expenses, and with a little thought you could easily get<br />
them large enough to wipe out your fee.<br />
<br />
===The Bottom Line===<br />
<br />
So the bottom line is, you’re safe. Your wedding fees are not taxable, they shouldn’t be included in<br />
your tax return and you aren’t part of the middle class crime mountain. Of course, if you do include your fees on<br />
your tax return the Revenue will tax them, because it’s their job to tax everything that gets put on tax returns.<br />
But that will be your fault not theirs. And if sometime in the past you asked a tax person whether your wedding<br />
fees were taxable, and you got the answer that they were, don’t feel cross. As I said earlier, tax isn’t simple, and<br />
you need to have all the facts of any situation if you’re going to come to the right conclusion.<br />
Quite likely you didn’t give the person all the facts.<br />
<br />
===In Practice===<br />
<br />
Of course, tax inspectors are much too busy tackling large scale evasion to bother about a handful of<br />
wedding fees, so you’re most unlikely ever to be challenged about them. But from time to time a few ringers at<br />
cathedrals and large churches have had a problem. Their church authorities have been handing out quite large<br />
amounts of money to a variety of people - including professional musicians - and not deducting tax as they<br />
should have done. When the tax inspector has sorted things out, the ringers’ wedding fees have been swept up<br />
along with everything else.<br />
<br />
So if - just remotely if - a tax inspector wants to start taxing your fees - either through your tax return<br />
or, more likely, by deduction - show them this article. If they still can’t agree, make a politely worded complaint<br />
and show this article to their boss. And if their boss can’t agree, make an equally polite complaint to their Regional<br />
Office. That, at least, should sort it.<br />
<br />
Absolution is yours!<br />
<br />
Steve is happy to answer all other Ringing and Money questions.<br />
<br />
==References==<br />
#Ringing and Money by Steve Coleman, [[The Ringing World]], Issue 4991/92.<br />
<br />
[[Category: Articles]]</div>MatildaHarrishttps://wiki.changeringing.co.uk/index.php?title=Income_Tax_and_Wedding_Fees&diff=1521Income Tax and Wedding Fees2011-10-31T00:35:19Z<p>MatildaHarris: </p>
<hr />
<div>__NOTOC__<br />
===Those Wedding Fees===<br />
<br />
Just in case you’re wondering why I’m writing this, I’d better explain that as well as being a ringer<br />
I’m also a money person. I used to be one of the Central Council’s Independent Examiners - what most people<br />
call, Auditors - and I do a lot of work with ringing and church accounts too. Professionally I also used to be a<br />
rather senior Inspector of Taxes. So it’s not surprising that among the purely ringing questions people send me,<br />
I also get a fair few money questions. And it’s those questions that this series is all about.<br />
<br />
'''''I’ve just read a most disturbing article about the burgeoning mountain of middle class crime, and I fear I am myself a pebble in that mountain. It’s four years since I started ringing for weddings, yet in all that time I haven’t declared a single wedding fee on my tax return. Small stabs of guilt are niggling me, so if you can give me absolution - or, better still, justification - I’d be really grateful.''''' SW - West Midlands<br />
<br />
By great good fortune I can give you both. But since, by your own admission, you’re middle class,<br />
middle aged and - I suspect - a middle brow ringer to boot, you won’t just want an answer, you’ll want an<br />
explanation to go with it.<br />
<br />
===The System===<br />
<br />
So beginning at the beginning, in this country, tax - thank the Lord - is purely a matter of law. There<br />
are no bribes and [http://www.ghengisfireworks.co.uk/ fireworks] no extortion, and nothing you receive is taxable unless the law says it is.<br />
But good though that is, tax law is unfortunately fantastically complex. The statutes themselves amount<br />
to several thousand pages, whilst the judicial interpretation of all those pages fills dozens of stout volumes.<br />
So if anyone tells you that your question is a simple one, don’t believe them.<br />
<br />
That said, it could be worse, because in a mere page or so, the law sets out a handful of categories that<br />
a chunk of income must fall into if it’s to be taxable. And that’s because not all income is taxable. Gifts aren’t,<br />
for example, nor are betting wins or the money you get for your old car when you buy a new one.<br />
So we have to look at each taxing category in turn and see if wedding fees fall into it.<br />
It’s rather like doing one of those Sunday newspaper puzzles. You ask yourself one question after another and keep ruling things out.<br />
"Is a wedding fee income from property?" No. "Is it interest on money?" No. "Is it a dividend from an overseas company?" No.<br />
<br />
No trouble with any of those. They’re simple questions with simple answers and most of the other<br />
questions are just as simple. But when you’ve eliminated all the simple ones, there are four questions left that<br />
need Employment?<br />
<br />
So first, are your wedding fees income from an employment? Are you in some way employed as a bell<br />
ringer? And you ask yourself that question because, as I’m sure you know, for tax purposes almost all earned<br />
income is divided into two categories: income from employment - often known as Pay as You Earn - and<br />
income from sell-employment - often known as Pay as You Please. And once you’ve asked that question, it<br />
won’t take you a moment to reply, “Of course I’m not employed as a bell ringer.” No ordinary ringer is. There is<br />
no contract of employment and nor are there any features of the arrangement which could lead anyone to think<br />
that an employer/employee relationship exists. Judges have spent a vast amount of time considering what might<br />
or might not be considered an employment, but they’d take one look at this situation and say the answer’s just<br />
plain obvious.<br />
<br />
Of course, if you were employed as something else - a cathedral verger, say - and you had to ring for<br />
weddings as part of your duties, your fees would be taxable, but that’s getting decidedly theoretical.<br />
<br />
===An Office Holder?===<br />
<br />
More obscurely, Schedule E - which is what the employment bit of tax law is technically called - also<br />
applies to people who hold an “Office” and who get income from that “Office”. And I say “obscurely” because<br />
no one’s entirely sure what an “Office” is. By and large, “Offices” are likely to be long-standing and vaguely<br />
prestigious posts, or posts that exist under some form of written constitution - the sort of posts that seem to<br />
exist whether someone fills them or not. The Master of the Queen’s Horse, for example,<br />
or the Lord Lieutenant of the County, or the Ringing Master of an Association Closer to the mark, vicars were<br />
always considered to hold an office - although there’s some doubt about that now - and church organists were looked<br />
on similarly. So might ringers also be considered to be office holders?<br />
<br />
Well, almost certainly not. In most churches the local band is a vague kind of thing. It has no fixed<br />
size, no terms of appointment and no written or centuries-old constitution. Any tax inspector who tried to pin an<br />
office on you would be quickly told to spend their time looking at something more sensible.<br />
Just possibly - and I’m speaking entirely theoretically here - it could be suggested that one or two tower<br />
captains hold an office. If so, their wedding fees would be taxable while the rest of the band’s wouldn’t be. But<br />
that would be such a bizarre situation that no sensible tax inspector would try to suggest it. So on Schedule E<br />
grounds, you’re safe.<br />
<br />
===Self-Employed?===<br />
<br />
But could you be self-employed? Could you have the trade or profession of “bell ringer”? Well, nothing in the<br />
statutes says what a trade or profession is, and judges have spent a really huge amount of time over the past 100<br />
years considering exactly that - normally when someone’s made a very large sum of money by buying and selling<br />
something. Boiled right down, the test is whether you have arranged your affairs with the primary aim of making money,<br />
or whether such money as you receive is just incidental to your private life or hobby. Quite clearly, wedding fees<br />
fall in the latter category.<br />
<br />
But if we’re just supposing, it’s possible that someone could organise themselves to ring at five<br />
weddings every Saturday at £20 a time solely because they wanted the money, and it could then be suggested<br />
that such a person was in trade. A tax inspector would have a distinctly uphill task trying to prove it, though.<br />
<br />
===Case VI===<br />
<br />
And you might think that that would be that, but unfortunately there’s also a small “catch everything<br />
else” section called Case VI of Schedule D. It claims to tax, “... any annual profits or gains not falling under<br />
any other Case of Schedule D and not charged by virtue of Schedule A or Schedule E ...“<br />
And at first sight that looks like it could be a tricky one because surely a wedding fee must be some<br />
kind of “profit or gain.” Well, you might think so, but while tax inspectors are rather fond of catch all<br />
legislation, judges certainly aren’t, and over the years they’ve come to the rescue in severely limiting what Case VI<br />
can catch. So first, only money received under an enforceable contract is taxable under Case VI, and<br />
although contracts can be oral as well as written, it would be very difficult indeed to suggest that wedding<br />
ringers have entered into a contract.<br />
<br />
For a start, it would be hard to pin down who the contract could be with - the church? The vicar? the<br />
bride’s father? the best man? The tower captain? And secondly, the arrangements are so vague as to who rings,<br />
when they ring and what they ring, that an enforceable contract could hardly be considered to exist.<br />
Of course, lawyers are always happy to assert remote possibilities with each other, and I dare say that<br />
at this very moment ringing lawyers all over the country are itching to put pen to paper with a counter view. But<br />
tax inspectors are practical people not vague theorists, and they would readily agree that no contract exists.<br />
And second, even if a contract did exist, you could still claim to set your expenses against the fees<br />
received. Those expenses wouldn’t include your costs of going to practice nights or buying ringing books or<br />
anything like that, but they would include travelling expenses, and with a little thought you could easily get<br />
them large enough to wipe out your fee.<br />
<br />
===The Bottom Line===<br />
<br />
So the bottom line is, you’re safe. Your wedding fees are not taxable, they shouldn’t be included in<br />
your tax return and you aren’t part of the middle class crime mountain. Of course, if you do include your fees on<br />
your tax return the Revenue will tax them, because it’s their job to tax everything that gets put on tax returns.<br />
But that will be your fault not theirs. And if sometime in the past you asked a tax person whether your wedding<br />
fees were taxable, and you got the answer that they were, don’t feel cross. As I said earlier, tax isn’t simple, and<br />
you need to have all the facts of any situation if you’re going to come to the right conclusion.<br />
Quite likely you didn’t give the person all the facts.<br />
<br />
===In Practice===<br />
<br />
Of course, tax inspectors are much too busy tackling large scale evasion to bother about a handful of<br />
wedding fees, so you’re most unlikely ever to be challenged about them. But from time to time a few ringers at<br />
cathedrals and large churches have had a problem. Their church authorities have been handing out quite large<br />
amounts of money to a variety of people - including professional musicians - and not deducting tax as they<br />
should have done. When the tax inspector has sorted things out, the ringers’ wedding fees have been swept up<br />
along with everything else.<br />
<br />
So if - just remotely if - a tax inspector wants to start taxing your fees - either through your tax return<br />
or, more likely, by deduction - show them this article. If they still can’t agree, make a politely worded complaint<br />
and show this article to their boss. And if their boss can’t agree, make an equally polite complaint to their Regional<br />
Office. That, at least, should sort it.<br />
<br />
Absolution is yours!<br />
<br />
Steve is happy to answer all other Ringing and Money questions.<br />
<br />
==References==<br />
#Ringing and Money by Steve Coleman, [[The Ringing World]], Issue 4991/92.<br />
<br />
[[Category: Articles]]</div>MatildaHarris