Payments that your employees make through a Payroll Giving Scheme are deducted from their pay before tax is deducted. This means that employees are given tax relief on their donation immediately – and at their highest rate of tax.
It's easy to set up a Payroll Giving Scheme for your business. There's little in the way of cost and administration, and you'll probably be able to adapt your existing payroll system to operate the scheme.
Figures recently published show that HMRC is the top Government department for payroll giving – almost 10,000 of its staff donate through their salary. In July, HMRC published figures for the UK that confirmed payroll giving had risen £4m since 2012 to £124m.
Charities benefit from this type of donation as tax relief at the donor’s highest rate is applied when the donation is made. Giving by direct debit and ticking the Gift Aid box effectively pegs tax benefits to the charity at basic rate only.