Parish Accounting Newsletter 

Quarter Three, 2018

 

Meet Angela Chen, Parish Accountant

Angela started with Trust Management back in September 2015 when Trust Management took over the accounting for our first Ministry Units. She worked with the treasurers to design their chart of accounts and new monthly reporting. It was a very busy time and Angela forged long lasting relationships with these Parishes, which were very keen to be early adopters of Parish Accounting.
After a year working with her Parishes within the Parish Accounting team, Angela went on maternity leave and had little George. She took a year off to spend time looking after George but also helped us during that time to provide cover when other Parish Accountants went on leave. Angela continued to study for her Chartered Accountancy exams during her maternity leave.
These days, Angela has a very busy life, working full time providing accounting services to 16 parishes, studying for her last two CA exams and looking after her family. She is definitely an expert of all matters related to Parish Accounting in the team.
She still finds time to practice her Zumba moves and loves shopping online looking for the latest stylish bargains.
 
Honoraria, Payments to Cleaners, Gardeners and Volunteers
The IRD has issued some recent clear guidance in respect of honoraria, koha and payment to volunteers. We have raised with some of our Ministry Units the tax treatment of payments the Ministry Unit has made to volunteers such as retired priests or parishioners.
 
What is the Definition of a Volunteer?
 
For these payments, a volunteer is defined as a person who freely undertakes an activity in New
Zealand:
  • that is chosen either by themselves or by a group they are a member of, and
  • that provides a benefit to a community or another person, and
  • there is no purpose or intention of private financial profit for the person.
Payments to Volunteers and Koha/Honorarium
 
Volunteers may be either:
  • reimbursed for any expenses they have from their voluntary activities, or
  • receive an honorarium for their services
 
Reimbursing Expenses
Volunteers often incur expenditure associated with their voluntary activities. This could be from the activity itself or their travel to or from the activity. Reimbursement payments are treated as tax-exempt income for the individual if they are based on:
  • actual expenditure, or
  • a reasonable estimate of the likely cost, where an organisation;
  1. reimburses for the expense before the activity, or
  2. when the actual expenditure can't be determined and the reimbursement is based on a reasonable estimate of the likely cost.
 
Honoraria
 
Honoraria are payments made for services provided where no fixed payment would normally be made.
 
If you are paying honoraria to:
  • an employee, the payment must be included in the payroll and PAYE charged.
  • someone who is not an employee, the payment is taxed at a flat rate.
 
If your ministry unit is paying honoraria to visiting priests, guest lecturers, and other volunteers and if these payments are not reimbursements of expenses, IRD guidance states that they should be taxed.
 
If you have any questions on this subject, do not hesitate to contact your Parish Accountant.
Payments to Cleaners and Gardeners
 
Cleaners and Gardeners are occupations specifically identified by the IRD as needing to be taxed at source.
 
This applies to individuals and sole traders whether they are GST registered or not.
If your Ministry Unit is making payments to cleaners and gardeners without deducting tax at source, please contact your Parish Accountant and they will take you through the documentation required from your cleaners and/or gardeners.
Payments to Suppliers
Recently there has been increased fraudulent activity in respect to fake supplier invoices and changed bank account details.
A recent scam in operation targets insecure business email accounts, where scammers hack into the email account and access invoices in the 'sent' items folder. The scammer can then easily copy the invoice and change details like the payment bank account number. They then resend the updated invoice from the compromised email account back to the customer asking them to make payment to the new bank account.
Once payment is made to the scammers account the money can quickly be moved offshore where the funds become increasingly difficult to retrieve.
For our protection and the protection of the Ministry Unit, we are requiring proof of bank account for all new suppliers or changed bank account.
We usually contact the supplier so there is no added workload on your side but we will let the administrator or treasurer know if we have any difficulty obtaining the information we need to process any payment.
Monthly Reports
 
Did you know that we could tailor your monthly reports to suit your requirements?
Do you want your reports on one page, with a larger font or with black ink so they can photocopy easily?
Do you want a comparison with year to date budget or last year’s results?
Do you want to see your expenses as a percentage of last year's budget?
This is all possible!
In our next quarterly newsletter, we will have examples of reports, but in the meantime do not hesitate to contact your Parish Accountant to discuss your requirements.