Payroll Giving

Friday 13th September 2013 Written Statements

[The Economic Secretary to the Treasury (Sajid Javid)]

The Parliamentary Secretary, Cabinet Office, my hon. Friend the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), with responsibility for civil society and I, are pleased to announce that following a consultation undertaken earlier this year, the Government are today publishing their response and outlining a package of measures to improve the operation and increase awareness of payroll giving. These measures demonstrate the Government’s continuing commitment to increasing the amount raised through payroll giving.

The Government have provided strong support to the charitable sector since 2010, having introduced a number of measures including the gift aid small donations scheme, the cultural gift scheme, measures to simplify the process for charity shops to claim gift aid on donated goods and introducing a reduced rate of inheritance tax for estates that leave a significant donation to charities.

As part of this continuing support, the Government ran a consultation between 24 January 2013 and 19 April 2013 on how to increase the amounts donated to charity through payroll giving. Payroll giving is a tax efficient means of donating and a valuable source of income for charities. The Government were delighted to receive over 100 responses, and thank everyone that responded.

Payroll giving provides an important platform to those who actively promote charitable giving in the workplace. Donors have already given well over £1 billion through payroll giving since it began in 1987 and the Government believe there is scope to see yearly donations increase further.

Having listened to respondents, and considered the options available, the Government will be taking forward a package of reforms targeted at four key areas. The Government have targeted the areas that can make the greatest difference, while avoiding placing additional burdens on those involved, or risk increasing the cost of payroll giving. These include improving the process for charities and payroll giving agencies, making it easier for employers and employees to use payroll giving, raising awareness of payroll giving among employers and incentivising employers with non-financial measures. Further details on these reforms can be found in the response document published today on: www.gov.uk.

Taken together this package of measures reflects the Government’s determination to unlock the potential payroll giving has to become an even more important source of support to charities and the fantastic work that they do.

The Government recognise that payroll giving works best when championed passionately from within an organisation and the Government will empower and encourage those who do this.

The Government will work closely with charities, payroll giving agencies and the payroll giving supporters in businesses up and down this country to implement these changes. With their help, payroll giving will continue to grow across workplaces, providing even greater support to the vital work done by charities.