How the taxman can boost your support for Charities

How employees support their favourite Charities via Payroll Giving.
Charities who benefit from workers who support their charity via their salary are Cancer Research UK, the British Heart Foundation, the NSPCC and Barnardo’s.
Payroll Giving provides charities with a regular source of income and also means that the gift given is boosted by tax relief as charitable donations are taken from gross pay.
For example, a higher-rate taxpayer making a £20 gift from pre-tax salary would see his post-tax pay reduced by only £12. A basic-rate taxpayer could pledge £16 a month from gross pay to give the same £20 each month to their chosen charity. Well this still applies today in May 2012.
It is also beneficial to the charity as it does not have to spend time on the administration of claiming back the tax relief via Gift Aid HMRC as it is done automatically.
Despite us still being in a difficult economic climate, payroll giving rose by 7.5% in the year to April 2011, according to Payroll Giving in Action (PGA).
Find out more on this on this via www.payrollgiving.co.uk and also speak to your HR Manager to establish whether it is possible to give to good causes through your pay.
Chuggers or charity muggers as they are known, who try to sign people up on the street to give regularly by standing order to charity, do have high success rates. But by organising your own charitable giving and doing it through payroll you are effectively saving the charity the expense of having to employ chuggers.
Payroll Giving to Charity makes every pound you give really count
The Government wants to create a revolution in charitable giving, harnessing new technology to speed the process. It is exploring ways to make it easier for everyone to support good causes.
In the meantime, givers can make every pound they give count by ensuring that today's donations are tax-efficient.
Payroll giving are schemes run through participating employers. They take money from your salary before tax and National Insurance have been deducted. Some employers even match your donations.
Contributions are then passed on to one of the dozen approved payroll- giving agencies. They process payments from hundreds of firms to thousands of charities.
The agencies take a fee, typically between 2 and 4% the value of the donation. Cressida was encouraged to sign up by her employer, online clothes retailer asos.com.
It has been running a Give As You Earn scheme – the most popular type of payroll giving – since 2009
Charities can also benefit from valuable tax breaks on your gifts. Don't forget charities in your will.
Legacies remain an important source of charity income and anything you leave to charity will be exempt from inheritance tax.
Gift Aid is also a powerful way of boosting your donations. It allows charities to reclaim the tax already paid on donations, turning a £100 gift into £128 for the charity.
Higher-rate taxpayers can then reclaim extra through their tax returns. A 40% taxpayer gets back an extra £25 per £100 donated and a 50% taxpayer can reclaim another £37.50 per £100 donation.
Giving to charity needs to be made easier according to Government.
One idea would see shoppers encouraged to give a few pence in 'change' to good causes at the till by rounding up purchases to the nearest pound when they pay by plastic. This is effectively an electronic version of the traditional till-side charity box.
The Pennies Foundation already has a pioneering scheme operating. Its first partner was Domino's, which added an optional donation for customers using its website.
Apparently more than 80,000 customers chose to round up their orders in the first few months of the scheme, raising more than £15,000 for Domino's chosen charity, Special Olympics GB - which helps people with learning difficulties through sports - and more than £5,000 for other good causes. I also read that Hotel group Travelodge has also gone live with Pennies recently.
The Government also wants to promote giving through cashpoints, with customers automatically gifting from their accounts at the click of a button. HSBC has been doing this since 2006.
How the taxman can help:
Make HMRC pay: Donations attract a tax rebate at the basic rate, but only if you 'Gift Aid' them by filling in a brief form. The charity processes this on your behalf. Higher-rate taxpayers can claim back the additional tax to their 40% or 50% higher tax bracket through their self-assessment forms. Last year the taxman rebated £1.1bn on charitable donations.
Give regularly: Charities benefit most from regular giving because it helps them budget. Donors can also benefit because regular giving makes it easier to reclaim tax.
Give in your will: About £2bn is bequeathed annually and such gifts are excluded from donors' estates for inheritance tax purposes.
Give your time as a volunteer or your unwanted possessions to sell: There are more than 6,000 charity shops nationally and these are increasing every month. However, ask your local charity shop before leaving your items outside their shop as some Charities prefer to collect them from you.

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