Is your company thinking of setting up a payroll giving scheme?
If so, take a look at this step by step guide on how to set one up, so you can donate money from your company on a regular basis, or on a one off basis, to a charity of your choice.
There is no tax taken off the donation with a payroll giving scheme
as the donation is taken out of the income before income tax is taken out, so this is a very popular way of giving to charities.
The Government is keen to promote this form of giving within the economy
although you should remember you are under no obligation to do so.
HM Revenues and Customs manage all Payroll Giving Schemes
so it is important you find an approved Payroll Giving agency (PGA) that is approved by them.
The company then needs to contact a PGA to work with
as they will send the money the company donates on the relevant charity.
Once the company has signed with a relevant PGA they will receive a contract detailing how the scheme works
However, the actual admin is handled by the agency so they make it as easy as possible for businesses to join the scheme.
An amount needs to be agreed upon first of all of which the company wants to donate
There is no limit to the amount your company donates.
The PGAs are usually charity run themselves
so be prepared to pay for a small admin fee when using them to donate to charity.
The employer is under certain obligations once he or she has joined a Payroll Giving Scheme
These include the following:
- They are required to inform their staff that the company is donating to a certain charity each month and they are welcome to join as a donor themselves and give money out of their salary on a regular or one off basis.
- The employer should also make sure they archive some important records too – these include a copy of the authorities made by any employees who have agreed to donate to charity straight out of their salary.
- Also, a copy of the contract of the employer’s donations with the specific payroll giving agency – this is important as it shows exactly how much the employer has agreed to donate – and the charity to which it wishes the money to go to.
- Along with copies of the relevant documents you and your employees have to show the contractual agreement between you and the PGA, details of payments made by each single employee should be recorded, as well as details of these payments, and all the receipts from the agency charity.