Workplace giving allows your employees to donate their money to charity in the most simple, effective and far-reaching way possible.
You can organise things in-house or use an employee benefits company. You will find that organizing employee benefits does not have to be an expensive or time-consuming process.
Quick and Easy
Workplace giving is simple to set up and means that donations made by your staff can be up to 45 per cent more valuable. Money given to charity directly from pay does not incur any tax, meaning that more of it will go to the charities that need it.
This method of donation also benefits charities in more ways than just ensuring that they receive more of your staff’s money. It often means that they can save on administration costs and plan more confidently and be more forward-looking, as they know that regular finance is on its way. It also benefits employees, increasing their commitment to and connection to their workplace, and has risk benefits to the company itself.
It is one of the easiest benefits to administer, taking just minutes to set up and needing only around ten minutes each month to maintain. To start, simply fill in two forms to register with a Payroll Giving Agent who has been approved by HM Revenue and Customs. Also ensure that your business can facilitate pre-tax deductions through your payroll system.
The Payroll Giving Agent will be responsible for distributing donations from your staff to the charities they have chosen. This means that your own payroll department will only have to send one payment each month, which will then be distributed accordingly.
Setting up the deduction for the employees who have opted to take part will be similar to setting up a pension deduction. The deductions will be made after National Insurance has been taken but before any tax is deducted.
Each month a payment will then be sent, along with a list of the staff that are involved, the amounts they are donating and any differences to the list from the previous month. This may include details of an employee who has left your firm.
Tax Benefits of the Scheme
A workplace giving scheme is not an expensive one to set up or administer and there are tax benefits to be gained. The costs are classed as a trade expense with an employee connection and are deductible when it comes to Corporation or Income Tax.
You may choose to meet the administration charge for the Payroll Giving Agent yourself or to enhance the donations as another method of increasing employee benefits. This would be classed as a charitable gift and could be deducted in Corporation Tax calculations.