If you decide you want to give to Charity then I take off my hat to you. It’s a wonderful thing to be able to help a cause out there but it needn’t break your bank or cause hassle setting up direct debits and so on.
Check with your employer if they operate a ‘Payroll Giving’ or ‘Give as you earn’ Scheme.
What do these scheme’s offer?
The idea of these schemes is that they deduct your monthly (or one off if you choose) donation directly from your pay. This is deducted before tax is calculated and so provides a tax break to you.
I bet you’re thinking .. huh????
So lets say you earn £100 a week(before Tax and NI) and you decide you want to donate £10 a week to charity
Usually you would pay Tax and National Insurance on £100.
However with a Payroll Giving/GAYE scheme, that £10 will be minused off the £100 before tax is calculated.
So the tax you pay will only be calculated on £90 = less tax to pay! woo hoo (You would still continue to pay National Insurance on the full £100)
What this means is the tax that would have gone to HMRC to go to the Charity instead. Which means you still make the same contribution of £10 a week but overall you have paid less tax to do so and there in lies the benefit to you and of course to the charity.
Remember always ask your employer if they operate a scheme as such and always double check if the company does indeed deduct before tax is applied just to be on the safe side before you make a decision. And then find a charity you would like to donate to, fill in the form and ta-dah all done! The good part is you can decide whether you want make an ongoing contribution to the charity or just a one off payment.
Just as an added note, the deductions should automatically stop once you leave that company so you won’t get chased around for donations but again check with your employer! If choose to start the deductions again with a new employer, you will have to check with them if they operate a payroll giving scheme.
Until next time..