How to record and manage fees & allowable extras
While there are only two statutory elements to a Parish Fee, in practice a funeral or a wedding may also include some additional costs, or 'third party elements', for optional services such as a verger or organist; heating or bells. The rules for these are summarised on the Allowable extras page.
This page offers guidance on how to record both elements of the Parochial Fee and any third party payments the church might receive.
The PCC portion of the fee is income for the PCC, which needs to be recorded in the books and presented in the accounts as unrestricted income of the church. In addition, if the church has appropriately charged for heating, this too is PCC income and recorded as such.
The DBF portion of the fee is not income for the PCC. It should be recorded in the treasurer's cash book, BUT should not appear in the church's annual accounts. The DBF fee is technically called an Agency (or Postbox) transaction - it must be submitted to the Finance Team at St James' House, preferably monthly, using the Fees Submission Form available in the Download box on this page.
Payments to third parties such as the verger, organist, choir, or bell ringers are also Agent transactions and should be recorded and managed in the same way as the DBF Fee. Note: any payment to any individual that is not a reimbursement of justifiable expenses is taxable income and must be declared to HMRC.
A helpful illustration
In 2015 a wedding took take place at St Mark's, and the wedding couple were informed that the total fee would be £640. This total was made up of two parts, the statutory fee (£445) and some allowable extras (£195).
Statutory Fee: £445
In the case of the wedding the statutory fee had four components,
- Calling banns, £28 [PCC income]
- Registrar fee for wedding certificate, £4 [PCC income]
- Service fee for PCC, £225
- Service fee for DBF, £188
Allowable Extras: £195
There are four components to the legally allowed extras in this example,
- Heating cost component, £50 [PCC income]
- Verger fee, £40 [Verger income]
- Organist fee, £60 [Organist income]
- Choir fee, £45 [Choir income]
Recording these fees as income
While all monies received, paid out, or passed on, must be recorded within the PCC's cash book - regardless of whether the money belongs to the PCC or not - only money that belongs to the PCC is reported within the PCC's annual accounts.
The cash book should show that £307 was received as fees due to the PCC (£28+£4+£225+£50). £188 should be shown as received on behalf of the DBF and a further £145 received as other Agent transactions (£40+£60+£45).
Expending these fees
The PCC's £307 is unrestricted income and may be spent on any general fund payment. The DBF's £188 must be paid in full to the DBF and may be combined with other DBF fee receipts at the time of payment. Money received on behalf of others (Agent transactions), when passed on to individuals, is taxable income and it is normally the PCC's responsibility to ensure that the correct amount of income tax is deducted prior to payment. For more information on this issue, see our PAYE page.
Invoicing funeral directors
It is good practice for each church to provide an invoice to the relevant Funeral Director for each funeral or burial. An Excel invoice template is available in the Downloads box on this page.
Funeral Directors must make all payments to the PCC financially responsible for the respective funeral or burial. Retired clergy and Self Supporting Ministers should claim their expenses and share of the DBF Fee from the relevant PCC.