It is easy and inexpensive to run and you can deduct any administrative costs from company profits for tax purposes. The easiest way to operate a scheme is to register with a collection agency. You will then send all your deduction to them each month and they will distribute the money to the chosen charities.

Your employee asks you to deduct regular charitable donations from their pay. You make the deduction from GROSS pay (before-tax pay), after the deduction of National Insurance Contributions but before the deduction of Pay As You Earn tax. You pay over all the money you deduct to an Inland Revenue approved Payroll Giving agency and they do the rest.

• A copy of your contract with the Payroll Giving agency
• The forms completed by your employees authorising you to make deductions from their pay
• A record of the deductions made from each employee’s pay
• Evidence of all payments made to the Payroll Giving agency

Most agencies make a small charge which they deduct from donations before distributing them to the charities. The charge is normally no more than 4% of the donation, or 25pence per ayroll deduction, whichever is the greater. Many employers like to pay this so that the full amount of their employees’ donations go to charity. If you pay the agency’s charge this will be allowed as a deduction against your profits.

Yes. This is an excellent way of demonstrating your commitment to the community and building good relations with your employees. Any matched donations you make will be allowed as a deduction against your profits for tax purposes.

• If you would like a member of Reading Area Charities Together team to visit you to discuss this, please contact us via this site
• Contact and register with a Payroll Giving agency – e.g. SWCG (www.charitablegiving.co.uk) or CAF (www.cafonline.org)
• Make any necessary changes to your payroll system
• Tell your staff that you are starting a Payroll Giving scheme and explain to them how they should request that deductions be made from their payroll.