Spread goodwill all year round with Payroll Giving

Your employees can support their chosen charities all year round with payroll giving. 

Payroll Giving

People support charities in many different ways from cash donations, to donating time and expertise, goods to be sold on, buying from a charity, sponsoring colleagues and lots more.

There are currently 169,411 charities in the UK with a turnover of just under £48bn* with the charity sector being a major part of our economy. You can find out more charity facts and figures here. https://register-of-charities.charitycommission.gov.uk/sector-data/sector-overview

People give to charity for a variety of reasons; the feel good factor when you give, it strengthens personal values and helps remind everyone that generosity, whether at home or at work is important. The act of giving makes us feel good. No matter how small an individual donation may seem, together, as a team, it can help make a big difference.

Payroll giving is an ideal way to support your chosen charity. Find out more below about the benefits of payroll giving.

What is payroll giving?

Payroll Giving is a scheme that enables your employees to give to any UK charity straight from their gross salary (before tax is deducted), and the tax relief they can receive depends on the rate of tax you pay see below:

• For every £1 you donate as basic rate tax payer you pay 80p so you save 20p
• For every £1 you donate as higher rate tax payer you pay 60p so you save 40p
• For every £1 you donate as additional rate tax payer you pay 55p so you save 45p

Monies donated by employees via payroll giving in 2022 was £123 million which is down from £137 million in 2021.

HMRC forecast the value of Payroll Giving relief to taxpayers for the most recent tax year, ending April 2023, which is at around £40 million.

People give to charity in lots of different ways – by credit card, collection boxes, direct debit, bequests, fundraising and regular donations.

Experience shows that the most sustainable form of charitable giving is through the Payroll Giving scheme, set up by the Government in 1987, which enables anyone receiving pay or a pension subject to PAYE to donate to charity from their gross pay.

As a business

As a business, do you have a nominated charity? If you do why don’t you consider payroll giving for your staff?

What are the benefits in payroll giving and how do you go about promoting it to your staff?

Payroll giving is easy to set up and once the payroll function is up and running it won’t cost you as a business anything at all.

Donations are deducted from employee’s gross pay, before tax is deducted. This gives immediate tax relief. Depending on their tax rate, if an employee donates £10 per month, they pay £8 from their net pay, the charity receives £10 – it’s a win-win.

Payroll Giving will help to support company CSR policies and will also help with staff retention. It’s a good thing to share with your wider audience that you are a socially conscious employer. You could, if you wished, match the contribution as a business to encourage staff take up.

You should promote payroll giving for your chosen charity well and often. Try to tell them rather than sell the scheme – charitable giving can be very personal. Staff can use payroll giving to support any charity not just the charity you support as a business.

If you would like to set up a payroll giving scheme then please visit the government guidance and list of approved agencies for payroll giving here.

Gift Aid vs Payroll Giving

For the charities, payroll giving can be less of an admin burden, but either way they are all always very grateful for any donations made. With Gift Aid, while the amount going to charity is higher, the charity carries the cost and hassle of claiming back the tax.

With payroll giving your donation not only costs you less, you receive a tax benefit and the charity automatically receives the donation - avoiding the added administrative burden of collecting Gift Aid.

Haines Watts East Anglia

For a number of years Haines Watts East Anglia has supported a variety of charities including Breast Cancer UK, Macmillan, Save The Children and East Anglia Childrens Hospice. The offices raise funds through various cake sales, jumper days and non-uniform days.

If you would like to find out more about payroll giving, inheritance tax planning and ‘leaving a legacy’ please contact us now.

*https://howcharitieswork.com/about-charities/how-many-charities/