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Did you know that if you make regular donation to NABD from your wages part of it will come from the money the tax man was planning to take off you anyway?
Although, from April 2004, Payroll Giving donations will no longer benefit from the 10% Government top-up, a new cash incentive has been introduced for small and medium sized organisations that offer the scheme to staff.
Currently, most large companies (FTSE 100 / FTSE 250) are already involved with Payroll Giving, but many of the smaller organisations and yet to take part. Therefore, the new cash incentive could be the spur that is needed to encourage smaller businesses to set up a payroll scheme that allows their employees to contribute to good causes tax-effectively, directly through their payroll. Further details of the incentive are yet to be announced, but you can read the Chancellor’s Budget announcement at www.hm-treasury.gov.uk/
Payroll Giving is a flexible scheme that enables donors to make charitable donations straight from their gross salary (before tax has been deducted). Therefore, for a basic rate taxpayer wanting to give a £10 donation, it will only cost £7.80, or just £6 for higher rate taxpayers. For example:
| Employee's Pledge to Charity (Gross) |
Actual Cost to Employee @ 22% Tax |
Actual Cost to Employee@ 40% Tax |
| £5.00 |
£3.90 |
£3.00 |
| £10.00 |
£7.80 |
£6.00 |
Furthermore, many employers are now encouraging the scheme by matching their employees’ donations.
An employee simply asks their payroll department to deduct regular charitable donations from gross pay before tax. The company then passes that money to their chosen Payroll Giving agency, who send the donations to the appropriate charities.
So why not ask at work if they have a payroll-giving scheme, if not ask them to set one up. Your support for the NABD could then be subsidised by the taxman.
For further information, look on the Inland Revenue website www.inlandrevenue.gov.uk/payrollgiving
Or contact them by phone or post :
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.
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