In the pre-Budget report last December, Gordon Brown announced that the Government would provide a grant of up to £500 to companies (with less than 500 employees) who were setting up a payroll giving scheme for the first time.

As an added incentive, the new grants programme will match the first £10 donated by each employee, every month, for a period of six months. Harley Davidson has recently signed up to the scheme.

Donating through a payroll giving scheme means that the money is taken from gross pay, rather than net. For example, an individual may want to donate £10 a month to a charity. Through payroll giving the charity would receive £10 but the individual would have given £7.80, assuming they pay standard rate tax.

‘Payroll giving is something every organisation can get involved in, whatever their size. I hope this scheme will encourage more small and medium-sized businesses to get on board,’ commented Fiona Mactaggart, Home Office Minister.