A leading payroll giving organisation has welcomed new figures showing a significant increase in charitable donations made directly from employees’ pay.
New data from HM Revenue & Customs (HMRC), published in late December, revealed that donations made in this way totalled £155 million in 2012-13, up from £118 million the previous year.
The number of employees giving via payroll also increased significantly from 735,000 in 2011-12 to 1,022,000 last year.
Peter O’Hara, managing director of Workplace Giving UK, which promotes and implements tax-effective giving schemes in the workplace, said: “This news is a great start to the new year.”
He said that the organisation was “thrilled” by the increase in money raised and participation levels in payroll giving. In 1990-91, the year payroll giving began, the total donated was just £9 million. It has since increased every year apart from in 2008-2009, when it dropped slightly at the start of the economic downturn.
An employer wishing to set up a payroll giving scheme needs to register with a payroll giving agency approved by HMRC and ensure that their payroll system has the facility to make pre-tax deductions.
Employees wishing to take part in payroll giving nominate the charities they want to support and authorise their employer to deduct specified amounts from their pay. As the donations are deducted before tax it reduces the effective tax rate that the employee pays.
At Nicklin, our comprehensive payroll solutions can include operating payroll giving schemes, which help employers to donate to charities in the most tax-efficient way and encourage support for businesses’ chosen charities. For more information, please contact us.