If your employer runs a Payroll Giving scheme this is one of the easiest ways for you to give regularly to CVQO – plus it’s both flexible and tax efficient.
Talk to your payroll department and choose how much you want to give each month to CVQO and the donation is then taken off your gross pay, before the tax man touches it.
Charities benefit from payroll giving because receiving regular donations means that they can make financial plans for their long-term future – knowing they can rely on the regular gifts of their payroll donors. Employees can give as much or as little as they like, and because the donation is taken from their pay before tax, it actually costs them less.
It doesn’t matter whether you’re a lower or a higher rate taxpayer - your chosen charity receives all the tax you would have paid. Your tax goes straight to your chosen charity instead of going to the tax man so you don’t need to worry about reclaiming the tax and neither does your charity.
Example - basic rate tax and Payroll Giving
You pay tax at the basic rate of 20 per cent, and authorise a monthly donation of £10. That means you save £2 tax (20 per cent of £10). The actual cost of the donation to you is £8.
Example - higher rate tax and Payroll Giving
You pay tax at the higher rate of 40 per cent and authorise a monthly donation of £10. That means you save £4 (40 per cent of £10). The actual cost of the donation to you is £6.
If your employer doesn't run a payroll giving scheme and you think they should then why not suggest it? It may be that they don't know what payroll giving is or that they don't know how to go about setting up a scheme. Full details can be found at Payroll Giving - information for employers and pension providers