Businesses are being encouraged to sign up to charity donation schemes that allow employees to make monthly contributions from their pay.
According to a survey by KPMG, most businesses do not currently have such ‘payroll giving’ schemes and are unaware that they are eligible for a grant of up to £500 by setting one up.
Payroll giving allows employees to give to charity on a regular basis through donations that are taken straight from their gross pay. Because it comes out before tax, this increases the value of donations for the charity.
Figures from a survey by the Charities Aid Foundation (CAF) and The Royal Bank of Scotland (RBS) found that firms currently give £95mo charity through payroll. However, this figure was generated by only 2% of all taxpayers, the study found.
The report concluded that if people questioned in this survey were to donate through payroll giving, charities would be £1.4bn better off.
“Payroll giving is the simple, tax free way for employees to give to their favourite charities and because the donation is taken off before tax the charity gets more money,” said Louise Mitchell of Precise Payroll, a provider of payroll solutions for businesses across the North East.
“It adds very little extra work and the benefits are three fold – the employee feels good about giving to a cause they are passionate about, the companies image is enhanced internally and externally and the charities themselves benefit from increased donations to aid continuing work for their cause.”
