Business Plus January Gift Aid and Payroll Giving

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Business Plus JanuaryGift Aid and Payroll
Giving
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What is Gift Aid?

• Tax relief on money donated to UK charities and
  CASC.
• Charity can reclaim basic tax rate from HMRC on
  its gross equivalent.
• For a basic tax-payer this adds approximately 25
  to the donation
• Until Apr 2011, an extra 3p per 1 donated is
  paid by HMRC.

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Gift Aid Declaration

• Written or oral authority from donor.
• Gives authority to reclaim tax on the gift.
• Can cover donations made since 05 April 2003 and
  all future donations.

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Claiming Gift Aid

• Complete and submit an R68 (claim) form.
• Use R68 (Gift Aid) to enter details of all
  declarations.
• Can submit unlimited claims per year.
• Multiple claims should not be less than 100.
• HMRC will pay by cheque or BACS.

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Keeping Gift Aid Records

• Retain records for 6 years.
• You must be able to produce a legible hard copy
  of the declaration.
• Maintain a clear audit trail linking each
  donation to donor to declaration.

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What is Payroll Giving?

• Scheme to enable employees to donate to any UK
  charity straight from their pay.
• 109 million was raised 2007/2008
• Donations are deducted before tax, so each 1 you
  give will only cost you 80p, and if youre a
  higher tax rate payer it will only cost you 60p.

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How does the tax break work?

• Donation made from before-tax pay, so after
  calculation of NI but before PAYE deduction.
• So your employee gets tax relief at their top
  rate.
• For example, a donation of 10 costs a basic rate
  taxpayer 8 because they save 2 tax.

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Benefits of Payroll Giving

• Generates sustainable income streams
• Perk for employees
• Improves organisations image
• Aids recruitment and retention
• Demonstrates corporate social responsibility
• Commitment to good causes

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Choosing Payroll Giving

• Company requires contract with a Payroll Giving
  Agency
• Payroll Giving Agency handles majority of the
  administration.
• Agency informs IR that your company is operating
  Payroll giving.
• Agency typically charges admin fee of up to 4 or
  25p per payroll deduction.

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Administration

• Employers pays all deducted money to an approved
  Payroll Giving Agency
• No tax forms to complete
• Must keep agency contract, employee authorization
  forms, record of employee deductions and agency
  receipts.

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Approaches for Payroll Giving

• Internal
• Donations made by own staff.
• External
• Actively recruit donations from another
  organisations employees through partnership with
  employer.

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Approaches for Payroll Giving

• Internal
• Donations made by own staff.
• External
• Actively recruit donations from another
  organisations employees through partnership with
  employer.

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Questions?
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Upcoming Events

• Employment Issues and the Economic Downturn
• A Business Plus networking event
• Thursday 5th February 2009, South Shields
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