Staff Payment Practicalities

Salary Scales and Comparisons

Many voluntary organisations use scales linked to local authority, civil service or specific groups like academic or nursing grades. The main problems are equating rather different jobs to particular points or grades on the scales and getting hold of the complete pay rate information on a reliable basis. Many of the scales are published and subscription services may be available – alternatively your organisation may have to become a member of the negotiating body (rates for small organisations aren’t always prohibitive).

NJC (local authority) scales can be found at

The Local Government (NJC) Job Evaluation Scheme has been adapted for use in the voluntary sector by the resource for groups in London, Personnel Employment Advice and Conciliation Service (PEACe). This links in with NJC pay scales. Just Job Evaluation the PEACe approach comes as a CDrom at £99, and includes a training module and practice exercises

There are also some sector salary surveys:

  1. ACEVO publishes regular surveys of Chief Executive pay, which is available to members – see support bodies page.
  2. Croner Solutions does regular (annual) surveys in many sectors, including charities (in association with CF Appointments). 2003 results are based on data from 270 charities of all shapes and sizes, covering 7,800 different jobs. Reliable, but not easy to get to grips with. Charity survey costs (at 2003) £305. Phone 01785 813566, email: enquiries@croner-reward.co.uk
  3. NCVO carries out an annual sector salary survey through Xpert HR Solutions (previously Remuneration Economics). Results published in September, and participating organisations get a discount (e.g. small organisations got the 2002 version for £65 as opposed to £290). Some professional consultants have been puzzled by past findings which are roughly 40% lower than their experience and other surveys say.

Other sources of salary comparators are organisations similar to yourselves (although they could be cagey if there is competition for staff!) or for admin work try temp agencies and other commercial firms who have similar jobs to yours.

Pension Issues

Update March 2012: Stakeholder pensions are now old hat, and new requirements for occupational pensions have a staged introduction (based on number of employees) from October 2012. The following needs amendment.

Employers should check the government’s pensions info page for more – also see Gov.uk employee pension page.

Both the HM Revenue and Customs site and that from The Pensions Regulator (was Occupational Pensions Regulatory Authority) are generally clear and helpful.

See Pension Provider page for pension schemes of particular interest to the voluntary sector.

For employees, PensionSorter is worth checking. Pensions Advisory Service (TPAS) is a grant aided voluntary organisation giving free help and advice to members of the public who have a problem concerning either a company or personal pension scheme. TPAS will also assist with general enquiries on State Pension Schemes; helpline for employees on 0845 601 2923.

Also check ethical investment issues at UKSIF (or see the VolResource Ethical Investment page).

Sector Trends

Levels of staff turnover are something managers and management committees worry about. In some areas, high turnover can be a good thing, as moving between organisations is the only way to gain breadth and depth of experience, with long service being an indication of low self-esteem or drive. (We have come across this in many small community-based groups.)

Surveys etc

(Material to be updated.)

Expenses

Payment of expenses can be more of an issue than salaries. The tax implications are often not understood, by employee or employer. See PAYE section below.

Car Mileage rates: HM Revenue and Customs sets out rates which they regard as not being taxable. Compare these with the NJC scale rates (see Payscales above. And don’t forget that there is a bicycle tax free mileage rate (of 20p in 2002), and cycles and cycle safety equipment made available to employees for commuting don’t attract tax charges.

Subsistence allowances. Again NJC publishes some rates (we haven’t checked if they are on the usual websites). Voluntary organisations may prefer to reimburse actual costs, within limits.

Other issues. There are many oddities, but some we have come across include:
– phone calls from home/own mobile. Do you recognise a rental element? If so, you will probably have to declare this with the year-end tax return.
– do staff incurring regular expenses (site visits?) need a float? Make sure record keeping is adequate on both sides. If you are going to pay expenses out of petty cash, can you ‘trap’ any problematic ones or compile adequate info. for Inland Revenue purposes? If you are going to pay by cheque, can you turn these around quickly enough so that staff don’t suffer and/or complain?



Income Tax, Payroll issues (PAYE/NIC etc.)

Once you know what you are looking for, get more details from the HM Revenue and Customs web site.

Voluntary groups are viewed in exactly the same way as any other employer. The only thing you need to make sure any adviser checks is the Small Employer criteria for Statutory Maternity Pay and Statutory Sick Pay, which means you can reduce NI contributions if you qualify. The Contributions Agency, which deals with National Insurance, became part of the Inland Revenue in 1999 (and is now called the National Insurance Contributions Office), so start at the web site given above.

The Employers Helpline is on 0345 143 143 for general tax and NIC enquiries. The Inland Revenue are now publishing their main guides and forms on CD-ROM annually, but seemingly only available at the start of the tax year. Get this through the Employers Orderline on 0845 7646 646 (you need your employers reference for this).

Specific Issues

It is worth trying to be extra rigorous in recording employee expenses – it is rare that voluntary orgs pay more than actual costs, but inspectors often want proof. Check out if you need a ‘dispensation’ so you don’t have to report all these details on the annual return, and also check that car mileage rates are within their scales. Download the current version of the HMRC booklet on Expenses and Benefits (480) but expect it to be around 100 pages.

Calling senior staff or your management committee/trustees ‘Directors’ can also lead to confusion, as there are special rules about people who are actually company directors.

Payroll Resources

Many local sector support organisations (CVS), community accountancy projects, DSC and some other sector trainers provide basic training on operating the payroll – check training provider page for contacts.

There are a number of commercial training courses, which can be more in depth:

  • Croner CCH – may have changed.
  • Payroll Alliance Originally set up as an independent employers’ payroll association, now part of LexisNexis, providing a helpline, training, manuals etc. Can be good value for those with larger or more complex payrolls.

Accountancy Services

Basic issues

For the voluntary organisation which is a registered charity or company, conforming to accounting requirements imposed by the charity SORP (developed by the Charity Commission with sector professionals) and/or company law (largely overseen by Companies House) can be one of the least rewarding aspects.

There are Community Accountancy schemes dotted around the country.

Failing the above, a number of specialist units in small to large accountancy firms can save you money in the medium to long term. They can help develop systems which can cope, and ensure your good intentions aren’t undermined by complexity. Equally there are some who only have a superficial understanding who will still pitch for your business. In this field, it is pretty essential to take up references (from some organisation in a closely related field if at all possible) if you are inexperienced or unsure. All those below, with one exception, are qualified to audit accounts for any type of organisation.

The one exception relates to ‘independent examiners’, defined under the charity SORP as being able to provide an alternative to a full audit for those charities with an income of under £250,000 in England or Wales, £100,000 in Scotland (as long as they aren’t limited companies as well). There is an Association of Charity Independent Examiners. Plus we reproduce an article on this subject from Gareth Morgan, who originally launched ACIE.

Audit/accountancy firms

The UK 200 Group of small to medium sized chartered accountancy firms has launched a charities group, which provides a pool of expertise for its members. This should help increase the understanding of particular charity issues within those firms. Contact the UK 200 charities group via 01252 333511.

The list of members firms at the Charity Practitioners Forum is also worth checking.

Some audit/accountancy firms we know best

  • BDO The useful charity newsletter is mailed to clients and often others who express an interest. Contact Don Bawtree or Kate Kirkland (the latter is their governance expert). Charity Unit, 8 Baker Street, London, W1M 1DA, phone 020 7486 5888, email: don_bawtree@bdo.co.uk
  • Crowe Clark Whitehill (was Horwath CW) The charity team is led by Pesh Framjee, one of the most familiar faces at charity finance events, and he knows his stuff. Pesh is Special Advisor to Charity Finance Group and has produced many briefing papers for CFG which can be obtained from the web site. The firm runs the CFG and ACEVO helplines and the non-profit sector accounts for over 25% of the its business. St Bride’s House, 10 Salisbury Square, London, EC4Y 8EH, phone 020 7842 7100.
  • Peter Gotham and Simon Erskine and their specialist Not for Profit Team (formerly Gotham Erskine) are now at Macintyre Hudson, New Bridge Street House, 30-34 New Bridge Street, London, EC4V 6BJ, phone 020 7429 4100. They continue to provide services for small to large charities, including management and insolvency advice. A monthly newsletter is available from the website.
  • Sayer Vincent Work closely with Directory of Social Change on Charity Accountants Conference, training courses and publications; produce newsletter. Some charity accounts information on the website, which is continuing to develop. Specialist IT and management consultancy services. 8 Angel Gate, City Road, London, EC1V 2SJ, phone 020 7841 6360, email: info@sayervincent.co.uk. Also Bristol office: Kings House, Orchard St, Bristol, BS1 5EH, phone 0117 905 5002.

Others



Management accounting, Support

  • Accounting Solutions for Charities Run by Steve Brown, who has 20 years voluntary sector experience, including 10 years at Finance Director level. A range of financial management support to organisations in the London area.
  • Peter Howlett ACMA. Independent financial consultant with 10 years financial management experience in the voluntary sector. 34 Bartlemas Rd, Oxford, OX4 1XX, phone 01865 251161, email: PeterHowlett@Moneyinsight.org
  • Graham Taylor A specialist Charity Finance and Management service dedicated to charities for more than 20 years. Phone 020 7538 1893, email: graham@gtcharityfinance.co.uk
  • Nigel Tinsley. Annual reports and accounts to SORP standards, Monthly and quarterly management accounts, Budgeting, Cashflow forecasts etc. for voluntary sector in West Midlands area. 82a Wrottesley Road, Wolverhampton, WV6 8SH, phone 01902 750301, email: nigel.tinsley@virgin.net

Payroll and Bookkeeping Services

The internet opens up new opportunities for payroll services. You may still find it useful to check whether a local CVS does this for groups in its area (for a fee) but potentially it is cheaper and more flexible over the web. CASH-online advises small charities and voluntary groups to use a payroll service and save a considerable administrative burden. If you want to do it yourself, see our Payroll Resources section.

Mainly accountancy

  • Charity Accountancy Services Accounting and back office services for charities up to £1 million turnover. Based in London.
  • Community Accountancy Service Ltd is in Manchester.
  • Daniel Hull of High Peak Bookkeepers has a charity background and is offering bookkeeping, payroll and office services in Derbyshire/Manchester area. Phone 07826 111964.
  • NfP Accountants is a small accountancy firm in London dedicated to providing financial management support for small charities.
  • CASE – Community Accountancy Social Enterprise – is/was trading arm for Community Accountancy Self Help, but problems with website at March 2014 indicate it could be defunct. Provided back office accountancy support to community groups across London.

Mainly payroll

Voluntary sector specific

  • Scottish Training Foundation Payroll A Glasgow based charity providing a comprehensive payroll service to small businesses, charities and voluntary organisations. Phone 0141 572 4326.
  • Charity BackRoom is run by Voluntary Norfolk and provides a payroll service to charities and social enterprises across England. Phone 01603 756726, email: enquiries@charitybackroom.org.uk

Others

VAT advice

Also see Tax Issues page.

  • Centurion VAT – South Wales and West.
  • Liaison now appears to be entirely focused on NHS VAT (used to have good charity knowledge too).
  • The VAT Consultancy Offices in Hampshire and London.
  • The VAT People A VAT consultancy based in Stockport. Charities page.
  • VAT Advice Les Howard is based in Cambridgeshire and has long experience, including reclaims for various churches and charities, especially on new builds.