Payroll giving is one of the most valuable sources of income for charities today. In 2007-2008, 717,000 employees gave approximately £109 million to various charities in this way.
Payroll giving is an excellent way for employees to make regular donations, of any amount, to the charity they personally support. Tax relief is given directly to the charity because the donation is given from gross pay before tax is calculated, thus reducing the donor’s overall tax bill. Therefore where someone donates £10 to us, in reality, it only costs £8.
The costs to your business of setting up a Payroll Giving scheme are minimal and you can claim tax relief for your costs in doing so.
Your business must have a contract with an HMRC approved Payroll Giving Agency before deducting donations from pay. Your employees indicate, on a simple form, which charity they want to support and how much they want to give.
Research has shown that Payroll Giving can be really successful as part of an effective employee communication programme, as well as being a great way of increasing your corporate social responsibility.
From January 2006, the Payroll Giving Quality Mark recognises and rewards organisations for making Payroll Giving available to their staff. A Quality Mark Award is available to those achieving over 1% employee participation.
If you would like to register, and would like a little more information, log onto the HMRC website.