Payroll giving is a highly tax-effective method of giving to charity, and uniquely gives employers a platform to encourage and champion philanthropy among their employees. There is no mandatory requirement for employers to set up a payroll giving scheme or for employees to participate.
Payroll giving and tax relief
Payroll giving schemes are commonly referred to as give as you earn (GAYE). They allow employees to make donations to any approved charity direct as a deduction from pay and receive tax relief on the contributions, regardless of the amount donated (there are currently no statutory lower or upper limits). Pensioners can also use payroll giving to give to charity by direct deduction from their occupational pension.
Previously an employee could make donations to UK charities and to eligible organisations equivalent to UK charities in the European Union and the European Economic Area countries of Norway and Iceland. This was reflected in the definition of charity given in FA 2010, Sch 6, Part 1 and SI 2010/1904. However, non-UK charities no longer qualify for gift aid as the jurisdictional
Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™
Access this article for free with a 7 day trial of Tolley+™ Guidance and benefit from:
- Expert practical tax guidance
- Ready-made templates, step-by-step-guides, interactive flowcharts and checklists
- The latest news updates, insights and analysis
Popular Articles
Exporting goods ― proof of export
Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence
Allowable deductions for employee-related expenses
Allowable deductions for employee-related expensesThis guidance note covers the tax treatment of some common types of trading expenditure relating to employees. Some of these are disallowable under general principles, for example the wholly and exclusively test or capital versus revenue expenditure.
Payments to trust beneficiaries
Payments to trust beneficiariesThis guidance note considers the trustees powers to make payments and whether the payment made is income or capital.This guidance note is designed to give outline and background for accountants and tax advisers who deal with clients establishing trusts. It is not
