Payroll giving

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Payroll Giving - The Most Tax Effective Way to Give to Any UK Registered Charity

British charities still lose a staggering £900 million to the taxman every year – giving through Payroll Giving could substantially reduce this loss.

2007 marked the 20 year anniversary of Payroll Giving in the UK – for higher rate tax payers the most effective way they can give to charity - and yet only 2% of employees currently give in this way. This isn’t because they choose not to - recent research by Oxfam and YouGov found that a third of British employees would give an average of £9.60 a month through their salary if they knew how to and had access to a scheme – this equates to a total of nearly £1bn annually.

Research undertaken by the Giving Campaign with employers about Payroll Giving showed:

96% of companies with Payroll Giving in place thought it was something a good employer should offer
83% said it was simple for staff to join
79% said it was easy to run
61% said it improved the company image
34% said it improved staff morale
27% said it improved staff recruitment and retention

As part of a broader corporate social responsibility policy, Payroll Giving offers employees the opportunity to channel their support for their social concerns whilst at the same time demonstrating the company’s strong credentials as a socially responsible business.

Payroll Giving is a simple, tax efficient scheme which allows employees to give to any charity they choose by having a deduction taken straight from their gross pay. There is no tax for the charity to claim back as it is automatically deducted.

Through Payroll Giving, a higher rate tax payer can give £25 to charity every month and it will only cost them £15, or two decent bottles of vino let’s say. The same donation made through Gift Aid would result in a £5.77 loss in tax for the charity.

Payroll Giving is the only way for a higher rate tax payer to pass their 40% tax straight to their chosen cause as only 22% tax can be claimed back by charities under the Gift Aid scheme. The Gift Aid situation is due to worsen - donations made through the scheme from April 2008 will only attract 20% tax relief further to the announcement in this year’s budget that the basic rate of tax will reduce. This will present a real funding crisis for charities.

What are the benefits of Payroll Giving?

You can give to any charity.
A regular income for the charity of your choice so they can plan for the future with confidence.
No extra paperwork for the charity as they receive your donation and tax in one go
A flexible scheme which allows you to change charities, alter the amount given or stop giving whenever you wish.

More than 10,000 employers in the UK currently operate the scheme.