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More money would be handed by taxpayers to good causes under government reforms aimed at making payroll-giving easier.
Around £118m was donated to charitable organisations by 735,000 people through payrolls in 2011/12 – but the Treasury believes annual totals could be increased through a simplification of the system’s administration, making it more attractive.
Payroll-giving allows UK taxpayers to donate regularly to the charities and causes of their choice. Money is deducted from gross pay, meaning each £1 given costs a basic rate taxpayer 80p. Only 2% of employers currently offer schemes, with just 3% of employees donating.
Workers are normally recruited to schemes by professional fundraising organisations that visit businesses, and transactions are handled by specialist payroll-giving agencies (PGAs), which under current rules must be charities.
The Treasury proposals to encourage altruism, outlined in a new consultation document, include:
- Standardised forms to make sign-up for donors simpler.
- Reduction of the processing time from 60 to 30 days, to make sure charities receive cash faster.
- Opening up the PGA market to competition from non-charities, to allow new entrants to invest in the giving system.
Comments on the proposals should be submitted no later than 19 April, either by email or post: Payroll-Giving Consultation, Edward Johnson, Personal Tax Team, PTWP, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ.
