Payroll giving

You can give to charity using a Payroll Giving scheme. Ask your employer if they operate such a scheme. If you give to charity using a Payroll Giving scheme you will already have received tax relief at source.

For example, if you make a pledge of £10 a month and you pay 20% tax, the tax relief at that rate is taken from your original donation of £10, so the cost is £8 a month.

  • If you are a 40% taxpayer, £4 will be taken from the £10, so the cost to you is £6 a month.
  • The value of your donation will be taken from the calculation of your income before tax.
  • If you are a basic-rate taxpayer, the tax relief is 20% of £1000, or £200, and the net cost to you is £800.
  • If you are a higher-rate taxpayer, the tax relief is 40% of £1000, or £400, and the cost to you is £600.
  • In our example, a basic-rate taxpayer could make a donation of £1000 over five years at a yearly cost £160 (£800 ÷ 5). This is £13.33 a month.
  • If you are a higher-rate taxpayer, a donation of £1000 could cost you as little as £120 a year (£600 ÷ 5) – equivalent to £10 a month – over the next five years.
  • If your company will match your donations, the charity will benefit even more.

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