Home Office grants £8.3 million to boost smaller firms' payroll giving

Howard Lake | 27 November 2004 | News

As announced by the Chancellor in the 2004 Budget, the Home Office is to grant £8.3 million to encourage smaller firms to set up payroll giving schemes and to encourage employees to make regular payroll gifts to charity.

The grant will be administered by the Institute of Fundraising and promoted by Business in the Community. Small and medium sized enterprises will receive a one-off grant of up to £500 depending on their size, as an incentive to set up a payroll giving scheme. In addition, the Government will match pound for pound, up to a maximum of £10 per month, an employee’s donation for six months from when the employee signs up.

The Institute of Fundraising will be responsible for supporting charities as they develop new relationships with SMEs. It will provide regular training opportunities for charities throughout the nations and regions of the UK, supported by marketing materials, information resources and access to advice. Business in the Community will be responsible for promoting the scheme to small and medium enterprises through small business networks.

Home Office Minister Fiona Mactaggart said: “Payroll giving is not just something that big organisations can do – 12.6 million employees work for small and medium sized businesses and there is a real need for their employers to get on board. I hope that this innovative new scheme – through which the Government will double employees’ donations by up to £10 per month – will be embraced by smaller businesses.”

The scheme is to be promoted as part of the 2005 Year of the Volunteer, an initiative which will encourage more people to give their time, talents and money to the voluntary sector.

Treasury Minister John Healey MP added: “Evidence shows that just 1 in 5 employees have access to a payroll giving scheme. By providing a financial incentive to employers to set up schemes, I hope that we can increase this number so that more employees have the opportunity to give tax effectively through the payroll.”

The grant will consist of two parts: a tiered financial incentive to employers who implement and promote a new scheme that will be dependent on the size of the SME; and a matched gift, up to £10 per month up to six months from when an employee signs up, from the Government in addition to each new payroll giving donation.

The scheme will be formally launched early in 2005.

About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale. He is the founder of Fundraising Camp and co-founder of GoodJobs.