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Payroll Giving: Background Information

11th Oct 2000
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The Government aims to double the amount of money given through the payroll to more than £60 million a year by April 2003. It also aims to increase the number of employers operating Payroll Giving schemes and to widen access to the scheme from one in five employees to one in three by 2003.

Most of the administration is carried out by Inland Revenue-approved charity agencies who are themselves charities. The employer simply deducts the agreed amount before tax and sends all the money to the agency once a month (at the same time as PAYE tax is sent to the Inland Revenue). The agency does the rest.

It will cost the employer little or nothing to run a Payroll Giving scheme and any costs that are incurred can be offset against profits for tax purposes.

Any employer wishing to find out more about Payroll Giving and setting up a scheme should call the Inland Revenue Payroll Giving Helpline on 0845 604 9000 or visit the website at http://www.inlandrevenue.gov.uk/payrollgiving.

Getting Britain Giving, a package of tax reliefs designed to increase charitable giving, were announced by the Chancellor in the last Budget. These measures were introduced following a review of charity taxation and extensive consultation, and included:

  • Payroll Giving scheme - abolition of the maximum limit of £1,200 a year, a three year publicity campaign and a 10% supplement on all donations for the duration of the campaign.
  • Gift Aid - abolition of the £250 minimum limit for donations and allowing donors to join the scheme by telephone or via the Internet with a minimum of formality.
  • A new income tax relief for gifts of shares and securities.
  • Extension of the tax exemption for fundraising events.

The measures were introduced in the Finance Act 2000 and are estimated to be worth about £400 million a year in tax relief.

Today, Big Brother star Craig came out in support of Payroll Giving.

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