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Over the last few years we've had a number of enquiries about Payroll Giving.
What is it? How do I arrange it? Does it involve stacks of paperwork? So I made
some enquiries into the scheme and found that it's not as complicated as it
looks. It's a straightforward way of donating to charity, giving the charity
more than you actually pay out of your pocket. The extra comes courtesy of the
Inland Revenue. So here's the basics of How and Why.
What is Payroll Giving?
Payroll Giving is a way of donating to a charity by having the donation deducted
from your wages. You tell your payroll department how much to deduct and they do
the rest. The amount can vary at your own request. There is no commitment to
donate. You choose the amount, you choose when. There are no limits on how much
or how little you can give.
How do I get Tax relief on my donation?
You don't have to do anything. Your wages department has to do very little.
Because the donation is deducted before you pay PAYE on it, a 10 donation for
example would only reduce your wages by 7.80. The other 2.20 is from your saving
on Income Tax (at basic rate). The Charity will receive 11.00. The extra pound
being the 10% Government Supplement (until April 2003).
What if my Employer doesn't offer a Payroll Giving Scheme?
Persuade them nicely. Basically all they have to do is register with a Payroll
Giving Agency approved by the Inland Revenue, deduct the money from your wages
and send the donations to the Agency. Most Payroll software can easily handle
Payroll Giving (I use Sage Payroll at work, it took me about 30 seconds to set
up). Show them this article. If they need more information, there are a couple
of contacts at the end of this article.
Ok, so I'm telling my Employer to deduct the money, they are sending it to the
Agency. How do they know which charity to send it to?
The Agency will supply you with a Charity Nomination Form which you return
direct to the Agency. They will keep your choice of charity confidential from
your employer if you wish. (Little hint here. National Association for Bikers
with a Disability. Registered Charity number 1040907).
What about the administration costs?
Most Payroll Giving Agencies make a small charge, normally no more than 4% of
the donation or 25p per donation, whichever is the greater. This is deducted
from the donation before it is sent on to the charity. Some employers pay the
agency's charges so that the full amount of the donation can go to the charity.
Contacts.
I got most of this information from the Inland Revenue website
http://www.inlandrevenue.gov.uk/payrollgiving
They can also be contacted at:
Inland Revenue (Charities)
St Johns House
Merton Road
Bootle
Merseyside
L69 9BB
Telephone : 0151 472 6029/6053
Useful leaflets are :
P/PG/1 Payroll Giving - a guide for employers
P/PG/2 Payroll Giving - a guide for employees
Payroll Giving Agencies.
There are about a dozen listed on the Inland Revenue website. The largest is
Charities Aid Foundation. Their administration charges range from nought to 4%.
They can be contacted at
Charities Aid Foundation
Kings Hill
West Malling
Kent
ME19 4TA.
Tel : 0845 600 0366
Their website is http://www.giveasyouearn.org
I know this is only a rough outline of the scheme, but I hope to be able to
update the details as I find out more. In time I will discover how the scheme
works from all angles because not only am I the Treasurer of this Association,
but I also have a paid job. And I'm about to start donating through the firm's
Payroll Giving Scheme, which I am setting up and running.
So ask your employers about Payroll Giving. If they don't know about it or don't
operate it, then show them this article. Most employers are quite eager to help
their employees in charitable endeavours. This is a way they can help you to
help us every single pay-day, with very little effort.
Byrnie (NABD Treasurer)
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