Payroll giving (or workplace giving) has been available to MPs for 20 years. However, even with the new users, this still means that only 2.6% of MPs are giving via this method. The national average at employers who offer the scheme is 6% take-up by employees.
Elena Joseph of Workplace Giving UK, which pointed out that:
“if all 650 MPs gave their recent 10% increase to good causes via their Workplace Giving scheme, the charitable sector would receive an extra boost of £392,916 per month, which equates to an astonishing £4.3 million per year”.
There was certainly an opportunity to increase the numbers when 69 MPs publicly stated that they would donate their recent 10% pay rise to charity.
Nevertheless, Workplace Giving UK welcomed the increase, adding that the House of Commons now qualifies for the bronze payroll giving quality mark. To reach the silver mark they need to achieve 5% of take-up.
Higher rate tax-payers
It is possible that MPs think they are giving tax-effectively by giving via Gift Aid. However, Gift Aid is only ever reclaimed at the standard tax rate – and all MPs are higher-rate tax-payers.
For example, for every £10 donated via payroll giving, the gift is worth £16.66, compared to £12.50 via Gift Aid. This is a difference of £4.66 every month for charities.
Workplace Giving UK had to resort to Freedom of Information Acts in 2013 and 2015 to acquire the information on whether MPs gave via payroll giving.
This year’s Payroll Giving Excellence Awards will be held at ‘The Other Place’, as MPs refer to it, namely the House of Lords.
Photo: Houses of Parliament, London – by Claudio Divizia on Shutterstock.com
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