Payroll Giving – the easiest way to commit to charities
The easiest and most manageable way to do this is via Payroll Giving, which also happens to be the most beneficial method for the charity, as they receive more than you donate, by way of an HMRC tax credit. We all know that the barrier to doing good can often be as simple as the admin involved. Actually making that call to set up a direct debit or standing order just keeps on moving down the “to do ” list. Donating by Payroll Giving removes all the admin for you as it is carried out by your employer’s payroll team, furthermore it can be set up immediately and stopped at any point. It is also the most beneficial way to donate as the charity receives a “top up” from the government.
In simple terms, Payroll Giving is a flexible scheme, allowing anyone who pays UK income tax to give regularly to causes and charities of their personal choice, on a tax-free basis. This means that for every 80p someone gives, £1 will actually be donated. So fundamentally you could donate £4 a month directly from your salary and the charity of your choice would receive £5. For higher rate tax payers, you can donate as little as £2.75 for the charity to receive £5.
This way of donating not only makes it incredibly easy for you to ‘do the right thing’ whilst being able to effectively manage your money but it also contributes to UK charities on a massive scale. Currently more than 1,093,000 people in the UK use the scheme to make a regular contribution to charity and in 2016-17 alone; analysis suggests that over £129m was donated to charity via Payroll Giving.
Given that your next pay cheque will be issued in January – now is the perfect time to tick off a new year’s resolution to give more.
If you are a charity reading this, it is worth noting that HMRC have recently updated their guidance in relation to Gift Aid, in light of the new General Data Protection Regulations (“GDPR”), which came into force on 25 May 2018. You can read our blog post concerning this matter here.
For further information on how we can assist with your payroll please get in touch at firstname.lastname@example.org