The Village Halls Podcast
A podcast for anyone involved in the running of Britain's 10,000 village, church and community and anyone interested in the vital community services they provide.
The Village Halls Podcast
Village Hall Accounts Made Simple
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Village hall finances can feel like a maze: you put on a ceilidh, win a grant for the roof, pay a cleaner a few hours a week, and suddenly you’re worrying about restricted funds, HMRC trading limits and even VAT. Marc Smith sits down with accountant Faye McLeod of CSM Accountants to make village hall accounts clearer, calmer and far more practical, whether you’re a brand-new treasurer or you’ve been quietly firefighting for years.
We get into the everyday nuts and bolts of charity accounting and committee finance: what records matter, how to keep receipts and grant paperwork tidy, and why the whole committee shares responsibility rather than leaving it all to one person. Faye explains restricted versus unrestricted funds in plain terms, including how to ring-fence grant money using accounting software, bank “pots”, or separate accounts so you can prove the money is spent exactly as promised.
Then we tackle the topics that catch out successful halls. When does fundraising become trading, and what happens if your weddings, bars or regular events push you over HMRC thresholds? We also talk charity VAT rules, why VAT registration is not always the win people expect during renovations, and how mixed charitable and commercial use can limit VAT recovery and trigger clawback rules later. Finally, we cover governance and legal structures such as SCIOs and incorporated charities, asset ownership and title transfer, and the right way to pay staff and reimburse volunteers without anything looking suspect.
If you want fewer finance headaches and more confidence in your hall’s compliance, press play now. Subscribe, share this with your committee, and leave us a review so more halls can find the guidance.
Welcome And Awards Reminder
Marc SmithHi, I'm Mark Smith and welcome to the Village Halls Podcast, sponsored by Allied Westminster, the UK's largest specialist provider of Village Hall insurance and the home of VillageGuard. Before we begin, a quick reminder that entries are now open for the Village Halls Inspiration Awards 2026, celebrating the incredible work happening in village, community, and church halls across the country. You can apply from now until the 31st of October, so please do consider putting your haul forward. So, welcome back. Many of you have listened to our Ultimate Guide podcast, which we put live a couple of months ago, and it was only when I was listening back to it that I realised that it can't be that ultimate without a podcast on accounts. Which brings us to today's podcast all about Village Hall Accounts. And I think this will complete the ultimate guide for now, anyway. So today I have the pleasure of welcoming Faye McLeod from CSM Accountants, who are based on the west coast of Scotland. Welcome to the podcast, Faye.
SPEAKER_04Thank you for having me.
Marc SmithSo there are five main topics to cover today. So I have a question first. Do you ever get clients who are actually on the ball with their accounts, or are they all a bit like me who do things very last minute?
SPEAKER_04We get the full range of sp of the spectrum from people who are absolutely meticulous with their with their with their accounting. And then we get the other end of the spectrum where people are juggling many, many balls and the hall accounts being one of them, and it isn't necessarily top of the list of priorities. So we get everything.
Marc SmithOh, it's amazing you said you're people that are really meticulous. I thought it would be I didn't think you'd get anyone up that level. So that that must be a um a pleasure to work with.
SPEAKER_04Yeah, it's it's not that frequent that it happens, but we do have a couple of people who who it's just their bag. They like the accounts, they like things to be just spot on. So um, yeah, but they're not not not not not not really the norm.
Marc SmithYeah, that's good that's good to know. Right. So the the first topic is just the accounts in
Why Accounts Trip Up Volunteers
Marc Smithgeneral. Uh so why why is it you think that the the accounts trip up so many of these like treasurers in the the committees?
SPEAKER_04Well, I I guess most people when they when they join a committee, um they're joining because they care about the cause or the project that they're getting involved with, or in this case, maybe a community hall in their local area that they feel is really important. And I don't think anybody goes onto a hall committee thinking, yay, I'm going to be doing a set of accounts. So um, you know, I think it's that they're getting involved because of the cause, and it's once you get involved on the committee that you suddenly realise actually it's not just about running an event, there's all the admin, there's all the paperwork, there's everything that comes with that. Um it can be quite difficult to get from a committee of volunteers somebody who's actually willing to take on that responsibility of accounts. Um, so it's it's it's quite a responsibility, but I think the thing to remember is that um it shouldn't really fall on one person. Yes, the treasurer is is essentially responsible for um the record keeping side of it, but the responsibility of the finances actually falls on everybody, um, and therefore it's really important that other people are also involved in that process and also understand what's going on.
Marc SmithYeah, yeah. That makes total sense. Yeah. So do you see like lots of like common mistakes from so they put it towards like the new treasurers who have maybe their first or second year? Do you see many common mistakes?
SPEAKER_04Um with with new treasurers, I think it really depends on on how how how good a handover they get if they're taking over from a previous gesture. And um also it can it can depend on how simple or how complex the operation is. So if you've got one relatively small village hall that um doesn't have an awful lot of bookings, that's going to be easier to manage than a hall that has um multiple halls, multiple meeting spaces, multiple bookings going on. Perhaps they're also running a cafe and a number of
Restricted Funds And Grant Tracking
SPEAKER_04other things uh at the same time. So it's it's more around the complexity of it as to whether people run into problems. Um, but also, you know, if if they receive um grants or donations for a specific purpose, there's a responsibility um to ensure that it's then spent for that purpose and from an accounting perspective to make sure that you're tracking the income and the expenditure that relates to that. So that that can be an area that can trip people up.
Marc SmithWell, it's funny you so when you get a grant, you have to track that it's definitely spent on uh say if it was a a for a new roof, for example, it has to be you have to account, it comes in for the new roof and it goes out for the new roof, it can't be spent on anything else whatsoever.
SPEAKER_04That well, that's correct, yes. Um when you're preparing accounts, and particularly if you're a charity, there are very specific accounting rules around um restricted and unrestricted funds. So restricted funds are where they're given for a uh a particular purpose, therefore you have a responsibility as a committee to spend it on that particular purpose. Um, and sometimes organizations can run into problems, perhaps um, for example, your hall roof, um you thought you were fundraising for £30,000, you maybe got a £15,000 grant from one organization, um, you've had a whip round in the in the community, you've done a few fundraisers and you've raised the other £15,000, for example, um, and then you get to a point where um all of a sudden you've discovered there's more extensive problems than you started when the work starts, and all of a sudden the project costs 35,000. Um and it can be it can be tempting, I think, for some committees to go, actually, we've got money over here, um, we'll just use that just now.
SPEAKER_00Yeah.
SPEAKER_04But if that money has come from another grant funder who has given that for a particular purpose, then you can't just dip into that. Um, so in that scenario where your roof costs have escalated, you'd have to get the get the begging bowl out, I think, and do a free oversee rather than feeling that you can just um use other money from funding that's been given for a particular purpose.
Marc SmithSo if you get a grant from somewhere, is it worthwhile creating like a like a savings pot or a separate account within the account that you can keep it hidden away? So you're well not hidden away, but you know, so you can say that's delved into because it is the roof fund.
SPEAKER_04Yeah, yeah, absolutely. Um you can do it within software, so you can use accounting software, for example, to segregate the different funds and keep them separate, or um, as you've mentioned, you could do that um through depending on which bank you use. There are some banks that will allow you to segregate different funding amounts, but we've actually had some clients who wanted to take it a step further and actually set up separate bank accounts for particular grant funds.
Marc SmithAll right, right.
SPEAKER_04And that gave them a little bit of physical separation as well. Um, and they felt made that made that a little bit simpler because that bank account only got used for that particular purpose.
Marc SmithYeah. Yeah, I can see the logic in that. Uh I think I've I know the bank that we use doesn't uh allow you to have pots, but I know there's there's there is bank accounts you can create a pot. I think in my head I would like to see it separated, but yeah, the software side of things as well. Uh so you put a little tracker or a some like a name attached to that that fund.
SPEAKER_04Yeah, that's right. And that's how larger charities um are very dependent on their software because they might have multiple um grant funders. Um, and you know, in particular, even hall developments, for example, where you're either building a hall from scratch or doing a complete renovation, that can get quite complicated from a grant perspective because quite often you're you're applying to maybe multiple trusts, and maybe there might be one or two bigger funders in there, but also there's the private donations that are coming in. So, particularly from the grant perspective, you do need to know where the grants come from, um, what what the purpose is for, and then that demonstrate that you've spent it on the purpose that it's been given for.
Minimum Accounting Standards That Work
Marc SmithYeah, so was with with that in mind, you have to really have your accounts up to scratch. So, what level do you need to do it to? If you're obviously if you're building a hall from scratch, your accounts would have to be a certain level, but if you're just maintaining a hall, or I'm gonna say bare minimum, like what you want to do. I know you shouldn't do bare minimum, but it you must be a different level of accounts for different um village halls and sizes.
SPEAKER_04Yeah, so so I suppose there's two two aspects to it. Um, first of all, it depends on what the legal structure and form of your of your organization is. Yeah, that will that will be what dictates the format of the accounts that you need to produce at the end of the year. So, for example, um the smallest charities um only need to prepare a receipts and payments account. So that will show what the receipts you've received are and what your payments are, and that balance at the bottom. So that's the simplest form. Um, although within that you do still need to identify restricted and unrestricted, and then beyond that, um you uh as the size of the organization goes up, you need to produce um much more substantial accounts. So you might need full accrual accounts. Um, for example, if you're uh a SCEO or you're operating as a limited company, and you would need full accounts in that situation. But from a from a from the treasurer's perspective, the important thing is that you have um a detailed record of what income you've got in, that you're recording the date to come in, who it came from, what the purpose was, and then similarly on the expenditure that you're recording the date that the expenditure was paid, who it went to, what project it related to, if it relates to a particular project, um, and also that you're maintaining receipts. Receipts are important for the expenditure, but also the grant paperwork that you receive is really important. Um, because that at the end of the year, when you if you're having your prepared accounts prepared by an external accountant, they'll want to see that so that they can understand what type of grant it is and whether there's whether there are restrictions that mean it needs to be treated in a certain way in the accounts.
Marc SmithAll right. So say if you if you were to buy chemicals for cleaning the floor, you just take a photograph of that receipt and upload it. I'm assuming obviously everyone's using software to do this, but you just upload the receipt to the software and that gets sent across to an accountant, and they can like, well, that's what they see.
SPEAKER_04That's right, that's right. So something like that for cleaning, you you would probably just treat that as an unrestricted expense because it's just part of the general running of running of the hall. So if if you just have a general fundraiser for the hall um and to help towards running costs, then and you don't do anything that involves external grant funding, then that can be very simple because that in that case it is just the income and the expenditure that you're recording, and you don't need to worry too much about the unrestricted, sorry, the restricted side of things.
Marc SmithYeah. Do you have to uh like so say if you have um like a dance on a Cayley, do you have to say what that money is going to say, do you have to say, oh, this is just for general upkeep of the hall, or this is for the roof, this is do you have to specify that as you're advertising it?
SPEAKER_04Um so if if it's just a general fundraiser, you could just say that it's in aid of such and such hall.
SPEAKER_02Yeah.
SPEAKER_04Um, but if you are specifically raising funds for a project, then you would need to say that it was for that project. And in that case, if you had, say, £2,000 of income from that particular Kaylee, for example, then that would become a restricted fundraiser. Um, so that would fall into the fundraising side of things under the restricted category, though, because you've specifically said that's the purpose you're using for.
Marc SmithRight. That's interesting. I had no idea for that at all.
SPEAKER_04But the fundraising side's interesting as well, because you know, the odd fundraiser, the odd thing is absolutely fine for a charity or a hall to do and just have that in as um as their regular kind of income.
SPEAKER_02Yeah.
SPEAKER_04But if you do it very frequently and you're making quite a lot of money from that, then it might very well be that HMRC come along and say, Well, actually, um these aren't charitable activities, you're now undertaking trading activities because of the frequency and the and the volume of those.
Marc SmithAh, right, yeah, yeah. That's one of the topics.
Fundraisers That Create Trading Risk
Marc SmithSo, trading, this is an interesting one because I had no idea this was a separate thing. I thought you could just do any fundraising and just bring in money willy-nilly as much as you could. So, yeah, what is what is trading then outside of the norm for a village hall?
SPEAKER_04So there's there's no, as you might imagine, because if you've dealt with HMRC before, there's no necessarily, not necessarily a clean cut answer to that one. So it's a it depends kind of answer. Um so the year 2000, for example, um lots of people wanted to get married in the year 2000.
Marc SmithUm, right, right.
SPEAKER_04Must have been a significant number, and they thought that would be a nice year to get married in.
Marc SmithEasy to remember.
SPEAKER_04Yeah, I mean it was it was probably memorable for lots of reasons, but um, from an accountancy perspective, uh, if you were dealing with charities, it became memorable because all of a sudden you had village halls around the highlands and islands um panicking because of the volume of uh weddings that they undertook. Right. And at the end of the year, their accountants are saying, hold on a second, the volume of weddings here means that actually this could be considered trading rather than um so, particularly if you're organizing a bar and you know, all that sort of thing, then you've got a lot of income coming in from that. And some village halls um that there are groups of ladies in the local community that'll come in and do the food, for example, as well. And it starts to, you know, if that's if that's two or three of those a month can um can become quite quite a quite a sizable volume to the undertaking. Um, and we have had situations where that has arisen where the level of events has tipped them over into being far too many for it to be um not considered just charitable activities or big or some small smaller fundraising activities. So they have ended up in that trading position.
Marc SmithAnd that's even if the money is still going towards charitable purposes or your what your holes there to do.
SPEAKER_04Yes, yes, it can.
Marc SmithUm there are BH Mercy don't tell you exactly what that line is. This is more of a not an opinion, I suppose they must be able to have some criteria they have that you're ticking that box.
SPEAKER_04Yeah, well, the that there are some numbers that are specified. So for example, um if your income's if the top if the charity's total income is under 33,000 32,000, the maximum permitted annual turnover from trading in that year is 8,000.
Marc SmithAll right, right.
SPEAKER_04You could undertake a couple of events and as long as you're under that that that threshold, um, or if your income is between 32,000 and 320,000, then it can be 25% of the charity's total income. Or if it's over 320,000, there's a maximum restriction of 80,000.
Marc SmithRight.
SPEAKER_04So for a charity that goes over, if it's turning over, say 400,000, it's the maximum permitted trading activities can be up to 80,000.
Marc SmithRight. And is that just the is that just like tax-free, and then anything above that you get taxed, or do you have to stop doing these events?
SPEAKER_04So if if you reach that threshold, then you're in jeopardy of risking the charitable status of the organization. Um so you can't just split it up between a bit of trading and a bit of charity. Yeah. You then need to, in most cases, create a separate trading subsidiary, which is a separate entity that can undertake as much trading as it likes without the restrictions of a charity, and then at the end of the year it can gift aid its profits to the charity.
Marc SmithAll right. So then so that they don't pay, so if they gift aid it to the charity, they don't have to pay tax in it either.
SPEAKER_04That that's right. Well, there's certain certain restrictions, for example. Right, right. Um, but um, yeah, it that that's pretty much the the the upshot of it.
Marc SmithSo don't be too charitable. I didn't realise that there was that many um I thought the HMRC would be like, oh, as long as a charity, just do do what you need to do to earn, you know, it's obviously do what do what you do.
SPEAKER_04Yes, yeah, and and and that mistake's been made before by other situations where you know things are done in the best interests of the organization, yeah, but not and not realizing that actually there are there are other rules that come in from HMRC's perspective that that might cause problems, and that's before we even enter the realms of VAT, which in itself creates a whole whole different complication.
Marc SmithYeah, well, we'll go come on to VAT in a second. I've got one question with the trading. So, say if someone's listening to this podcast and they're like, oh, and they've gone over and they've not told anyone, how how what's what do you do to deal with it? And are there fines? That's always the the question.
SPEAKER_04So so it's not the end of the world. Um, I think that the important thing is once you realise that that situation has been triggered, that you get get the advice that you need in order to get things back on track. Um, and and we have come across situations before where organizations have inadvertently gone over the trading threshold. Um, and it's been a case of writing to HMRC um and letting them know the circumstances, what's happened, and rectifying it thereafter. Yeah, yeah, and fixing it, creating a situation that is not going to allow that problem to continue. So, quite often, if it's going to be an ongoing income source, it would be going down the route of creating a trading subsidiary and um allowing the trading activities to go through there.
Marc SmithAll right, right.
SPEAKER_04That does create its own administration though, because now you've created you've got a charity that you're trying to keep the records for, and you've now got a separate trading subsidiary as well that you will need to maintain separate records for.
Marc SmithYeah, but I suppose that the better you do, uh then you can maybe uh employ someone to do it or just pay an accountant to sort of can you do this? Because you you should have technically have more income that you can actually spend on keeping it afloat or keeping it running.
SPEAKER_04That's right. And you know, we're seeing a situation now where a lot of village halls can't access the sort of grant funding that used to be there before in the past. And you know, costs are escalating, electricity costs are going up, insurance costs, for example. Um, a lot of a lot of uh charities in the Highlands used to be able to benefit from a group insurance policy that Highland Council had, um, and that was relatively um low cost, but now they're having to fund that themselves. So these costs are escalating, and the grant income that might have been there in the past isn't necessarily there.
SPEAKER_02Yeah, yeah.
SPEAKER_04So a lot of halls are having to think much more like businesses anyway, um, and particularly if they're going down the route of uh a big renovation project or a big expansion project, um, they're very much having to think about um taking their fund that their income levels to a much higher level, but also paying people to do things um within that as if it was a business, which it really is.
Marc SmithYeah, I suppose ultimately it is a business. You're trying to make money to do whatever your purpose is. Yeah, it does make sense. Okay, then right.
VAT Thresholds And Renovation Pitfalls
Marc SmithVAT. What's what happens with that? Is it the same as uh like you or I if you hit the if what is it, 99? What is it now? 90,000.
SPEAKER_0490,000.
Marc SmithSo if you hit 90,000 turnover, does that if if you're the Do you automatically have to then register for VAT or have they got more allowances as if you're a charity?
SPEAKER_04So the same rules apply to charities when it comes to the trading side of things as do for uh to other businesses.
SPEAKER_02Yeah.
SPEAKER_04So if you if you're a charity and you're only doing charitable activities and there's no trading, then um first of all, you probably wouldn't be eligible to register for VAT.
Marc SmithRight.
SPEAKER_04Um and and and secondly, those exempt activities, so grant funding, fundraising, um, donations, these are all exempt for VAT purposes.
Marc SmithOh, right, right.
SPEAKER_04So you could have, say, uh a charity that's got £120,000 worth of income, but only 30,000 of that, for example, comes from trading, in which case they are nowhere near having to register for a VAT at all.
Marc SmithYeah, yeah.
SPEAKER_04Um that's that's good, yeah.
Marc SmithYeah, because it's like obviously it's uh the VAT thing is quite complicated. So you I'm thinking I'm thinking of uh the account side of things, you really do have to keep a tab on everything. So that my low my bare minimum is not even covering what we're discussing here. So yeah, you'd have to keep track of absolutely everything.
SPEAKER_04Yeah, for for a regular um community hall that's doing sort of regular community hall type activities and not a lot of trading. I mean, my advice would be steer clear of VAT because it's just an extra layer of admin that you can do without. The situation where a lot of kind of halls end up starting to think about should we be that registered is either because they're doing a lot of trading or they're going to do a renovation project and there's maybe a shortfall in the funding that they've identified to cover the costs. Um, and usually somebody who's already running a business will say, Ah, what about VAT? Um, but it's not quite as simple as that when it comes to charities. So if you have a building, for example, that's uh 50% of it you're going to dedicate to charitable activity, so that might be the hall side, and then 50% of it is maybe a shopping cafe.
SPEAKER_02Yeah.
SPEAKER_04The 50% that relates to the charity, you'll probably not be able to claim back.
Marc SmithAh, right, right, right, right.
SPEAKER_04So so it gets it gets much more messy than it would in a normal business as well. If you have the mix of a building that's going to be used for charitable activities, and then a build the rest of it's going to be used for business activities, then you start to end up in a situation where yes, you can claim VAT back, but it will be restricted to the percentage that relates to the business side.
Marc SmithAh, right, right. Yeah, so uh yeah, so if if you were building a hall from scratch, would you register for VAT to get the VAT back? And would you only get a percentage of the VAT back? So say if half it was for charity, half it was for commercial, you'd only be able to claim back 50% of that VAT amount, or you're allowed to register for VAT and then deregister as soon as it's built?
SPEAKER_04Uh so put really simply, yes, but there's also sort of 10-year clawback rules that mean that if you change the use of your building part way through, yeah, you could end up with HMRC knocking at your door saying you're now using the whole the whole building for charitable, but you claim back 50% of it for business. Um that you claim back back.
Marc SmithOh, right, right. Yeah, I suppose there's always a way, there's always a way for them to get you, I suppose. That's good, yeah. My mind is spinning now.
Governance And Legal Structures Explained
Marc SmithUm right, so I suppose we'll move on to the next topic, which is is is governance. Uh so are they do they work side by side with your accounts or are they two independent uh entities?
SPEAKER_04Um so I guess I would say governance is probably more important than the accounts in many ways. Um in that the for every every hall and every hall committee and every charity, you need to understand what the what the legal form of your organization is, yeah. And then the second part is what rules govern that. So they're the probably the two most important things when when for hall committees and charities to remember is do you know what your legal form is and do you know what the rules are? Because the accounts and what comes out of the accounts falls out of those rules, yeah, yeah, and will dictate the format of your your your accounts as well. Um so in in terms of legal form, some halls are still operating as unincorporated associations, yeah, yeah. Um, and there are others that are um set up as limited companies with um uh uh without shares, so um with a without, but there's also some of them that are registered as charities, some as SCOS, some as limited companies with charitable status. Yeah, so there's a number a number of options, and also community interest companies is uh is now a newer legal form that that exists as well. Um, it is important to have some kind of legal form around it though, um, and nowadays we'd be advising whole committees that are unincorporated associations to think quite carefully about whether they actually want to be in that situation. Um because that for anyone on a committee that is an unincorporated association, they hold personal responsibility for what goes on um in that building and in that on that committee as well. So it's not not advisable in the current climate where you know you want to make sure that um you're not personally responsible for the health and safety of everybody who's going to be into that building.
Marc SmithNo, that's definitely true. We we spoke about that in the insurance one uh as well, and it was actually like a few people have spoken to since like you're personally responsible. I was like, Yes, it turns out you are, and you're kind of like, well, yeah, you better so in Scotland it's a SKIO, isn't it?
SPEAKER_04That you You could be a SKIO or you could be a regular limited company.
Marc SmithAll right, right status. Uh okay, wait, what's the is it a short answer for what's the difference between the two? Does it that is it one just purely charity?
SPEAKER_04And then one other one's no SKIO is a newer form, and it and it's supposed to be a little bit simpler than having a limited company and then separate charitable status. So it's a sort of halfway house between your unincorporated organization and your limited company. It gives it gives you a little you don't have to comply with the company's house side of things because it's a scheme.
SPEAKER_03Right, right.
SPEAKER_04Um and therefore you're only reporting to Oscar and you're not reporting to Oscar and Company's house. Um, so it's a little a little bit more streamlined than having a limited company with charitable status. But prior to Skios being created, uh having a limited company with charitable status was the norm for incorporated charities.
Marc SmithAnd is that what's it called in England and Wales and in Northern Ireland? Do they have their own, like or are they just limited or have they got a version as well of the Skio?
SPEAKER_04So for a lot of charitable things, what happens in Scotland follows England, but interestingly with Skios, it was the other way around. Skios were brought in in Scotland first. And so they have something that's fairly similar um now in existence as well.
Marc SmithAlright, what's that called? I should really know that, but I don't know the name of it.
SPEAKER_04Um well I think it's just a charitable incorporated organization without the the Scottish at the front.
Marc SmithOh, right, right. Well, that's interesting, yeah. Yeah, because it does make sense and and streamline is uh the way you want to do it. That's right.
SPEAKER_04So so I would say there's a there's a there's another element to consider as well around the assets
Asset Ownership And Transfer Mistakes
SPEAKER_04and ownership. Right. Um, because just by becoming a SKIO doesn't necessarily tick all the boxes. So if you're an unincorporated organization and you become a SKIO, you do also need to follow up on with whom does the legal ownership of the asset lie.
Marc SmithRight, right.
SPEAKER_04Um, so you you need to make sure that the the asset, so if in an unincorporated organization, um nobody necessarily owns the asset, but the responsibility for it lies with all the individuals.
SPEAKER_02Yeah, yeah.
SPEAKER_04So um you know there needs to be caretaken. Sometimes I've I've seen kind of old trust documents that were created. Um, so you then need to make sure that that second step of not just creating the incorporated organization, but also making sure that the assets are transferred into that entity.
SPEAKER_02Yeah, yeah.
SPEAKER_04Yeah, and some some halls are not actually uh owned at all by the organization or the individuals around the organization. It might be that the the hall might lie on land that was owned by the council, for example, yeah, and the organization has just taken um they've taken on the building of the hall as a sort of leasehold asset rather than an ownership. So I would say for for you know hall committees it's worth understanding the legal status of the property as well as the legal status of the committee itself.
Marc SmithOh yeah, I would just assume that the hall was owned by well, the company that was you know, the the association or the skill that it's around. See if it's owned by the council, does that mean they have to cover all the the bills for replacing the roof and whatnot? Yeah, yeah. I assume not. Yeah, have you ever heard of anyone that they've thought like so say they've got they they've assumed they've owned the hall and then you've said, Oh, you don't actually own the hall. Do you ever get is that actually a thing, or do do people generally know from your experience of village halls or even other committees, do they know?
SPEAKER_04It it actually happens a lot more frequently than you might think.
Marc SmithRight.
SPEAKER_04I think a lot of a lot of charities are told if they've if there'd been an organised an unincorporated association, yeah, like hall committees, they've been told they've been given the right advice in terms of get yourself a ski or make yourself a ski o' yeah, but the bit that's quite often gets forgotten is who owns the assets and how do you get those assets transferred from one entity to the other. So, for example, um if if for example you you you your own pet property, for example, you decided you were going to um put it into a limited company, there's a process you have to go through in order to ensure that the title and the title is adequately registered with the land registry to make sure that that title actually belongs to that entity. Yeah, yeah, and that's the bit that quite often gets forgotten. Um they do the right thing in terms of getting the entity set up, but then forget actually there's that process of transferring assets in there and making sure it's done um adequately.
Marc SmithYeah, yeah. I never I would never even assume that would be a I thought it's you would just trans, it would just go over like a tick of a button or on a computer, just as it done transferred over.
SPEAKER_04So so if if you don't do the the formal legal transfer, what you've then ended up with is two entities. You've ended up with a SCEO that's operating the building, but potentially the unincorporated association still is responsible and whole and and would be considered to be trustees of the building itself?
Marc SmithYes, it would yet, yeah. That's an incentive to get it out of the unincorporated uh organizations, get it somewhere protected.
SPEAKER_02Yeah, yeah, absolutely.
Paying Staff Properly Through PAYE
Marc SmithYeah, so the the final topic I've got here is uh so paying people. Now the example I'm gonna give is like a caretaker or a cleaner. Should they be uh employed? So say if it's like if every week, I don't know, they do four hours, say for example, uh at a set time, would they become employed by the the community company, the company or the SQL, or would they be self-employed and give you an invoice every every month?
SPEAKER_04Uh so unless they're running an established cleaning or caretaker type business, yeah, um, that's sort of advertising their services and you know they have their own employees and that sort of thing. Um the the situation with the cleaner coming in to do four hours a week, they would in all probability be considered an employee of the hall.
Marc SmithRight.
SPEAKER_04Um the only the only situation where they they wouldn't be considered an employee would be in that situation, say for example, you're using one of the local cleaning companies on Sky and they come in to do that. Now that that um that's a situation where you know they're an established business, they're going to give you an invoice, and you know that it's um it's it's all kind of legally set up. Um the the there are situations where we've seen people paying cleaners on a more casual basis, but from an HMRC perspective, um they would probably consider them to be employees, and um the the responsibility and the risk of paying any unpaid tax and national insurance in relation to that would fall on the whole committee.
unknownRight.
Marc SmithSo with that, is that just the same as being a company, you have to register for PYE, you have to do uh an a pension contribution, or is that it was probably under the limit, actually? So, what's the responsibility there?
SPEAKER_04Um Yeah, it's it's similar to any other business. If you had an employee and you were employing them for for however many hours, um you you should register for PYE and declare that income. Um that then protects the whole committee and and its its trustees or its directors, um, because you you you know that you've done the right thing and you've um you you've declared that income and that expenditure as well. Um, and then you know there's no comeback at a later stage from HMRC if they come along and they do an investigation and they say, well, actually, you should have had these people as employees. Yeah. Um, because the other thing is HMRC are likely to put the liability back on the hall, not on the person who said they were unemployed, sorry, self-employed and might not necessarily have paid the national insurance and tax on that.
Marc SmithAh, right, right. There's an arguable reason to become incorporated. We're doing this, we're doing well. You'll be busy now incorporating all these uh village halls. So, my my final question, and this was actually this was one that was from me, because I bought something for my local village hall, and I've not invoiced them for it yet, because I'm the
Paying Trustees Back Without Suspicion
Marc Smithtreasurer. So, my question is how do you pay someone back who's paid for something for the hall that doesn't look suspect? So, like someone like if I was to hand an invoice in for it was say was it was a key box that I bought, how do you make that what's the process? Do you have to have someone there with you while you pay yourself? What's the process so it doesn't look suspect?
SPEAKER_04So, as a as a minimum, as long as uh you need to have an invoice for that. So if you've got the key box invoice and um it's going to be fairly apparent whether the key box is there or not.
SPEAKER_03Yeah, very, yeah, because I fitted it as well, yeah.
SPEAKER_04Yeah, absolutely. So something like that's reasonably straightforward because the invoice will show what's been purchased and the purpose of that. Um and and as long as that's there and there's a trail of what was purchased, and we can see that it was for the hall's purpose, um, that that you know that that's reasonably straightforward. Um you can go a step further and have an expense claim form if you wanted. All right, yeah. That would allow you to have a kind of cover sheet effectively that would say what the purpose of it was for, and you could actually have that then counter-signed by another hall committee member, for example. Yeah, um, and therefore it sort of puts has another set of eyes looking at that um to make sure that they're happy that it's legitimate and that there's no kind of questions asked later on.
SPEAKER_02Yeah, yeah.
SPEAKER_04Um, so that's certainly one way to do it, particularly if it was for you know, like say travel expenses, if you were having to travel a distance to um uh a community forum of some sort where you were at the hall. Um, those sorts of situations you'd probably want to have somebody else countersigning that so that uh at least it's not then just all on you. Um have got some input too.
Marc SmithNo, that's good. I really like the idea of the expense form. I think that makes more sense rather than just putting forward an invo invoice. You know, sorry, showing the invoice. An expense form is quite good. Um excellent. Well, uh that's all I I've got a million questions actually. That's not all the questions I have, but I'm not gonna take up any more of your time because uh there's so many things you've brought up there that I had no idea there was actually a thing. So, yeah. Well, thank you very much for your time uh on the on the podcast. I'm sure it'll be well listened to. Uh you probably get questions fired back and forward now. Uh but yeah, it's it's so good to have someone on that knows what they're talking about when it comes to that because it is a it's a a minefield. Uh yeah, it's it's yeah, thank you very much for your time.
SPEAKER_04Oh well, thank you for listening.
Sponsors Thanks And How To Enter
Marc SmithMany thanks to our headline sponsor and specialist Village Hall insurance provider, Allied Westminster, the home of VillageGuard, for making this podcast possible. And to online booking system provider Hallmaster, who also sponsor our podcasts and can be found at hallmaster.co.uk. You've been listening to the Village Halls Podcast, a unique listening community for Britain's village, community and church halls, and anyone interested in the vital services they provide. Don't forget, entries for the Village Halls Inspiration Awards 2026 are open from now until the 31st of October. So visit our website to find out more and get involved. We will be back again soon with another episode. For more information, visit the VillageHalls Podcast.com where you'll also find the links to our social media pages. Thanks again for listening in, and until next time, goodbye for now.
