It is expected that churches will prepare an annual budget covering at least a 12-month period indicating how costs, such as the assessment, payroll or stipends, insurance, upkeep of property, etc will be met. Church treasurers will present the budget to the Church Council and then must ensure payment for the agreed obligations.
It is important to note:
- Projects that require long-term financial planning should be factored in to the budget.
- It is good practice to have a financial strategy that sits alongside the annual budget as this will help with financial planning for larger items of work as listed on the Quinquennial Inspection or larger building projects.
- ACAT offers resources and guidance on financial planning and budgets that can be of assistance.
Click here to find out more.
Below you will find further information, including information about Reserves.
In general, a budget would be expected to include the following expenses:
- Assessment costs
- Stipends and allowances (for circuits and districts)
- Lay employees, including pension and National Insurance costs (if applicable)
- Budget for planned activities
- Budget for donations and grants to be distributed (if applicable)
- Office expenses
- Eco-church or Action for Hope activities
- Budget for annual running costs for properties
- General repairs and cleaning
- Utility bills (council tax, gas, electricity)
- Insurance
- Inspections (portable electrical appliance testing (PAT), gas safety, electrical, fire protection, first aid)
- Works arising from the annual inspection
- Net zero improvements
- Works listed on the Quinquennial Inspection to be carried out within 12 months
- Money set aside for works listed on the Quinquennial Inspection that need to completed within the next four years.
Insurance
To fulfil their legal responsibilities, managing trustees should ensure that adequate cover by insurance has been arranged. In practice, this would usually mean effecting insurance to cover all property, including contents for which they are responsible. This should include loss of revenue following damage to property, legal liability, loss of money and personal accident. The sums insured for property, whether on buildings, contents or an organ must be sufficient to allow rebuilding or replacement in the manner provided for under the chosen policy, normally reinstatement as existing. Furthermore, insurance may be required for trustee indemnity, protection against terrorism, events or protection against a cyber-attack.
A failure to set sums insured adequately may lead to a position of under-insurance. Should this happen, claims which are made may have to be settled in proportion to the degree to which the item is under insured. For example, should an item be insured for only 50% of its value, when settled, only 50% of the amount claimed may be paid. Methodist Insurance can assist managing trustees in this respect by offering a free, five-yearly inspection and valuation service to all its policyholders.
Click here for further information from Methodist Insurance.
Reserves
An important part of financial planning is setting an effective reserves policy for the church, in order to ensure effective stewardship of its financial resources. Further guidance can be found on the Reserves Policy Guidelines.
Click here for a template reserve policy.
Reserves should not be allowed to accumulate or sit unused for years. There should be a clear plan for the level required and how to deploy excess reserves, or how to build up sufficient levels. If you have a surplus, you could contact TMCP or CFB about investment options. Alternatively, you could consider giving a donation to another Methodist church in the spirit of being Connexional. Further guidance on reserves can found on:
- For England and Wales, The Charity Commission website
- In Scotland, the OSCR website for churches in Scotland
- For Isle of Man, charities are referred to following the SORP policies
- For Jersey, please refer to the The Association of Charities Reserves Guidance
- For Guernsey, please refer to Guernsey Chamber of Commerce guidance.
Payroll and Allowance Rates
The Methodist Conference approved the recommended basis of the annual increase will be the average of the increases in the Consumer Price Index (CPI) and the Average Weekly Earnings Index (AWEI). As well, in accordance with Conference resolutions, hourly rates paid to all lay employees should be at least the Living Wage rates.
Stipend
- £31,980 per annum
Living Wage Salary Rates
Click here for further information about Lay Employment and please send any queries regarding the Lay Employee Rates to: hr@methodistchurch.org.uk.
- £12.60 per hour (all regions including Scotland)
- £13.85 per hour in London
Last updated: 1 September 2025
Taxation Directory
This Taxation Dictionary is a set of notes on the tax treatment of a number of topics, put together chiefly with Methodist ministers (i.e. presbyters, deacons and probationers) in mind. We have attempted to make this a comprehensive set of guidance notes on tax issues, although it will need to be amended from time to time for additions, and also in the light of any changes indicated to us by H M Revenue & Customs.
At the front there are two indices, one categorised by type of expenditure with accompanying section coding, the other in alphabetical order with the section code as a cross-reference.
Please liaise at circuit level to ensure that this is distributed effectively, and as we aim to keep it updated regularly, on the website, would encourage you to use the document electronically, so you have current information.
Please note that wherever reference is made to ‘minister’ this is to include all such persons for whom a Form P11D must be completed and/or is in receipt of payment through the central stipends system.
If you have any queries please do not hesitate to raise them with us at the Payroll Section, and we shall do our best to answer them.
Please email stipends@methodistchurch.org.uk or call 0207 467 3780 during office hours.