We ask the experts for their answers … have your say online
Elena Joseph, head of new projects and charity liaison at Workplace Giving UK:
Workplace giving, payroll giving or give as you earn remains a simple concept and we welcome any campaign to increase awareness and take-up.
Whether the campaign works remains to be seen. We are not holding our breath as past government campaigns have failed dismally to hit the mark, or address the correct audiences but have lacked creativity.
These failures led to such frustration for us that we decided to devise, fund and launch our own campaign, Geared for Giving, which has achieved more since its inception in 2008 than any previous campaign, government or other.
There is no doubting that times are tough, for individuals and for charities too, which is why it is even more important that it is made as easy as possible for good intentions to be turned into fantastic actions.
We do not believe anybody should have their arm twisted to give to charity, but experience tells us that many employees are happy to, or want to, support a cause close to their heart, but have never got round to doing it.
If their employer offered a simple way for them to do this (not to mention a tax-efficient one) and it was easy to join in, then more employees would do so. Indeed, analysis of pooled data from the CAF/NCVO Individual Giving Survey 2005, 2006 and 2007, suggests that men are more likely than women to give from their pay than by any other method.
We eagerly await the campaign, but hope that past mistakes will not be repeated.
Lesley Fidler, associate director at Baker Tilly Tax and Accounting:
If employees believe they have no money to give, no amount of tax relief will help. In such cases, employers might consider ideas such as the secondment of staff, donations to employees’ fund-raising efforts or, possibly, gifts of their trading stock to a charity.
Those employees who can afford to give, and want to do so tax-effectively, have the options of a payroll-giving scheme, if their employer offers one, or using Gift Aid. The advantage of a payroll-giving scheme is that full tax relief is received at once and no tax return or claim is needed. The employee’s donation is made out of gross pay, so a £10 gift results in £8 less in net pay for a basic-rate taxpayer (£6 or £5 for higher and additional-rate taxpayers). What employers often overlook is that the gift has no effect on national insurance contributions.
These are due for both employer and employee on the pre-donation gross pay. HM Revenue and Customs’ website has lots of information about setting up schemes but does not make this quirk clear.
However, employees (and some employers) may be surprised to find that the agency behind their payroll-giving scheme takes an administration charge from their donations.
In contrast a Gift-Aided payment would not attract this handling charge if made directly to the chosen charity rather than through an agency. On the other hand, the charity has to devote resources to making its online Gift Aid tax reclaim, and employees who pay more than basic-rate tax have a tax return entry or P810 Tax Review form to complete to claim their additional tax relief if they decide to take this route.
Janet Forster-Warnes, chair of the Association of Payroll Giving Organisations (APGO):
The Association of Payroll Giving Organisations (APGO) is encouraged by the government’s plan to promote a culture of payroll giving within organisations as part of the campaign Every Business Commits.
Since the recession, gifts to charities from pay have actually risen by £2 million and despite the economy, payroll giving is demonstrating its strength as an efficient and effective way for employees to give. Also, employers added over £13 million to their employees’ contributions through matched funding schemes.
Another indication of the increased interest in payroll giving is the growth in PG Quality Mark Award certificates, which in 2010 was 3,347, an increase of 1,200 on the previous year. With the introduction of a platinum award, we could see a substantial growth from organisations wanting to take part and enter the National Payroll Giving Awards.
We want to see the government campaign aimed at companies that do not offer the scheme and the present financial position will have little effect on this. Personal circumstances may deter some people from donating, but there are still thousands who are not aware of this method to donate to charity or who would choose to give tax-effectively through their pay but are unable to do so because their employer does not offer this resource. We would also like to see an easier way emerge for an employee moving to another job to continue their giving and reduce the attrition rates.
We welcome this focus on payroll giving, which, when in place, has high retention rates and provides regular, dependable funding for charitable organisations, and look forward to being part of the forum to make it happen.
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