14.Payroll giving and post-tax salary donations
This section includes the standards for promoting payroll and post-tax salary donation schemes in the workplace. It includes meeting HMRC requirements and making sure that employers and employees have clear expectations about how your scheme works.
There are various types of fundraising within the workplace, and there are direct laws and self-regulation that you should keep to. This code specifically covers donations made direct from an employee’s salary. This could take either of the following forms.
- Payroll giving – a tax-efficient scheme where the donation is taken from employees’ pay before tax is taken.
- Post-tax salary donations – where employees’ donations are taken direct from their salary after tax has been taken.
These schemes only apply to giving to charities, and all payroll-giving schemes must be run through a payroll-giving agency chosen by the employer.
Payroll-giving agencies receive employees’ donations, which the employer has taken through the payroll, and pass these to the relevant charities.
The Charitable Deductions (Approved Schemes) Regulations 1986 place certain requirements on employers. We have not mentioned these in this code, but it may be useful to be aware of them.
HM Revenue & Customs’ (HMRC’s) website has a list of currently approved payroll-giving agencies.
As well as the standards in Part 2 Working with others, the following standards apply to fundraising through payroll giving.
14.1.Professional fundraisers and payroll giving
In this section, ‘you’ means a payroll-giving agency or a professional fundraiser involved in payroll giving, unless we tell you otherwise.
For more standards on professional fundraisers, see section 7 Professional fundraisers, commercial participators and partners.
If, as a payroll-giving agency, you use fundraisers who fall within the legal definition of a professional fundraiser to promote payroll-giving schemes to employees, you must have a written agreement in place and make sure that the fundraisers make the necessary solicitation statements.
If you are a professional fundraiser, you must make sure that information relating to new donors is processed and passed to the charitable institution as soon as possible.
If you are a professional fundraiser representing more than one charity, you must make sure they are all represented in a completely neutral way.
14.2.Pre-tax payroll giving
In this section, ‘you’ means a payroll-giving agency or professional fundraiser involved in payroll giving, unless we tell you otherwise.
As a payroll-giving agency, you must have a written agreement in place with employers using your scheme.
You must meet the requirements in The Charitable Deductions (Approved Schemes) Regulations 1986 and any amendments to these.
If you (or an employer) are going to highlight the different levels of tax relief, you must make sure fundraisers have up-to-date information from HMRC.
You must make sure that donors are aware that, following a payroll-giving promotion, they are still free to choose to give to any charity.
For more information on the legal requirements for payroll-giving agencies, see the HMRC website.
14.3.Promoting committed giving in the workplace
In this section, ‘you’ means a payroll-giving agency or professional fundraiser involved in payroll giving, unless we tell you otherwise.
Before asking a group of employees for donations, you must agree conditions of access with the relevant employer.
If you are a fundraiser, you must wear visible photo identity badges, provided by the organiser of the fundraising activity or the relevant fundraising organisation, at all times.
You must make sure that donors are aware that they have the right to end an agreement to donate at any time.