By Hayes Knight – 18 January 2010

As a result of the recent payroll giving legislation being passed, employers may now offer payroll giving schemes to their employees.

Payroll giving schemes allow employees to make regular charitable donations directly from their salary or wage payments. The employee will receive an instant tax credit each pay date based on the amount donated rather than having to file a donation rebate claim form at year end. This is effectively achieved by way of a reduction in the amount of PAYE that is required to be made from the employees salary or wages.

Employers who file their monthly employer schedules electronically will be able to offer this service to their employees if they wish to do so. The employer is responsible for forwarding the payments to the charitable organisations on a regular basis.

To make the scheme easier to implement, we suggest that employers will need to make decisions on how often employees can change who they make donations to and how many charitable organisations the employees can choose from.

If you would like to discuss this further or any information relating to your business affairs contact  Phil Barlow or your Hayes Knight adviser.