# HMRC: salary sacrifice can't be used to donate via payroll giving

- Link: https://fundraising.co.uk/2009/09/07/hmrc-salary-sacrifice-can039t-be-used-donate-payroll-giving/
- Published: 2009-09-07T12:47:30+01:00
- Author: Howard Lake

![](https://www.fundraising.co.uk/files/images/news/workplacegivinguk_200.jpg)

Workplace Giving UK, which promotes giving to charity via the payroll, has secured
a clarification from HMRC on whether workplace giving could operate via salary sacrifice
schemes.

Elena Joseph, charity liaison director at Workplace Giving UK, was aware that some
large employers were operating workplace giving for their employees via their salary
sacrifice schemes. She added: “we didn’t want any of the companies and charities
we work with to fall foul of any legislation, so we were very keen to get some clarification
from HMRC”.

Nick Jones, senior policy adviser at HMRC wrote advising: “For a salary sacrifice
arrangement to be effective, the employee should have given up control of the money
sacrificed. This is explained in more detail in HMRC guidance which can be found
online at

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www.hmrc.gov.uk/specialist/salary_sacrifice.pdf

As is clear from this guidance, a salary sacrifice arrangement is not effective 
if, in practice, the employee has merely asked the employer to apply part of his
cash remuneration on his behalf.”

Joseph expanded on this interpretation, saying that HMRC had “clarified that Workplace
Giving schemes were always intended to allow individual employees the freedom of
choice to make donations to causes that were important to them.

“Unfortunately, salary sacrifice schemes cannot allow such a choice as in effect
the individual employee is “sacrificing” his or her salary and cannot therefore 
have any say over what charity or cause it ends up with. An employer can nominate
a cause and invite employees to sacrifice salary via such schemes for that charity
but the actual donation eventually made is a corporate donation from the company
and not an individual donation from the employee.”

Workplace Giving UK point out that there is nothing to stop employers running both
salary sacrifice schemes and Workplace Giving schemes. However, they are very different
methods of giving to charity.

It is now clear that salary sacrifice can not be used to donate to the charity of
an individual’s choice via the payroll.

www.workplacegiving-uk.com

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