Payroll Giving – Giving more to Charity
If you are a UK tax payer, then you may be aware that there is a new method of donating to charity that can mean that your chosen charity receives a lot more money than you actually donate. This is a very clever and generous way that the government has come up with for encouraging people to donate more to charity. It seems as if the government has realised the amount of good that private charities do for the country and that by and large, if charities did not undertake these tasks, then someone else would have to step in to do them.
The way payroll giving works is that you fill in a form with your employer and they will automatically deduct the amount you wish to donate from your pay check each month. This is done without you having to do anything, much like a standing order. However, the big difference with payroll giving is that the donation will automatically take into account the level of tax you pay and reclaim the tax for you. This means, if you are a basic rate tax payer, and you decide to donate £10 to a charity, you will be repaid the £2.20 tax so that the donation actually only costs you £7.80.
Another thing that the government has decided to do is match your donations up to certain limits for a set number of months. This would mean that you £7.80 referred to above would now actually get your chosen charity a donation of £20. There are also some employers who have also decided to match your donations so that your donation would become £30. This of course depends on the policy of your employer.
Another benefit of the system is that if you terminate your employment or leave your job, the donation will cease.