Payroll Giving

One of the easiest and most efficient ways to donate on a regular basis is by making a donation directly from your salary. Ask your department if they are signed up to a “payroll-giving” scheme – and if they are, you can ask to have a donation taken out of your salary, before tax, every month. Vicki Pulman of the Charities Aid Foundation (CAF) says that if you are a lower-rate taxpayer, the cost of donating £15 to charity would be just £12 out of your net salary – or just £9 if you’re a higher-rate taxpayer.

If your employer doesn’t offer a payroll-giving scheme, you may want to set up a direct debit, but make sure that the charity is claiming “gift aid” on your donation. Gift aid is simply a way of the charity claiming back the tax relief that you could have got by donating directly from your gross salary – and can be claimed on any donation, whether it is a monthly direct debit or a one-off pledge. So if you donate £100, the charity will receive an extra £28 if it claims the gift aid. Furthermore, if you’re a higher-rate tax payer, you can also claim back an additional 18 per cent tax relief when you file your tax return – which means that the cost of donating the £100 will work out at just £77.

If you are setting up a direct debit, it’s often better to go straight to the charity – or set up a CAF account (www.cafonline.org/give-as-you-earn.aspx) – rather than signing up with one of their representatives on the street. These direct marketing companies often end up receiving the entire first year of donations for signing you up.