With statistics showing a drop in generosity through payroll giving over the past few challenging years, the HMRC are reminding employers within the July 2024 bulletin on the advantages available to charities, employers and employees through payroll giving (sometimes referred to as Give As You Earn).
They remind us that the UK is one of the most generous countries in the world, with more than two thirds giving to charity on a regular basis and a record £12.7 billion given by the public back in 2022.
Payroll Giving gives employees the opportunity to support charities and receive tax relief on all of their donation. This also helps promote the employers corporate social responsibility.
Tax relief is given to an employee that regularly donates by direct deduction from their salary. The support employees provide their chosen charity enables them to make plans and focus on their objectives.
The level of tax relief given depends on the rate at which the individual is taxed at, but all the relief for a donation is kept by the employee.
If an employer wants to encourage payroll giving, you do not have a scheme already set-up you will need to contact an approved Payroll Giving agency who will provide the employer with a contract setting out the details of the scheme, along with all the necessary forms to operate.
More guidance can be found at Chapter 4: Payroll Giving.
Can payroll software support payroll giving?
Many payroll software offerings support charitable giving. Some will even offer a scheme previously known as Pennys From Heaven were payroll round downs are applied with the excess difference being donated to charities
The scheme is now known as Microhive:
PAYadvice.UK 12/7/2024