STTRES
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PERSONNEL SUB-COMMITTEE
13TH OCTOBER 1986
PAYROLL DEDUCTIONS FOR DONATIONS TO CHARITIES AND UNEMPLOYED CENTRES
IN
HAMPSHIRE
REPORT OF THE COUNTY TREASURER
1. Introduction
1.1 The last Personnel Sub-Committee asked for a report back on
i) the staff side request for deductions from pay at
source towards
unemployment centres;
ii) the changes in taxation which may affect contributions
to
charities.
2. Payroll_giving_schemes_for_charities_(give_as_you_earn)
2.1 Proposed legislation to be effective from 1st April 1987
would permit
tax deductible donations at source to individual charities,
or
perhaps through a central clearing agency, and is now
generally
referred to a "payroll giving".
2.2 Payroll giving arrangements will be operated through
registered
agency charities approved by the Inland Revenue. The
detailed
regulations governing the scheme are yet to be issued but,
briefly,
it is envisaged they will work as follows:
- employees wishing to take part will authorise their
employer to
deduct the amount of the donation from pay
- employees, through the operation of the payroll, will
be
provided with tax relief on donations of up to £100 a
year
- the employer will pay the donations over to the agency
and the
agency will act as a clearing house, distributing the
donations
to individual charities as instructed by the employee.
The
direction of giving is confidential to the employee and
the
agency.
2.3 The scheme is entirely voluntary, no employer or individual
employee
will be obliged to run or take part in a scheme. The use of
an
agency charity is a condition if tax concessions are to be
obtained,
but an employer may enter into more than one agreement.
2.4 Until the detailed regulations are received it is not
possible to say
what the actual cost of running a scheme will be but it is
envisaged
that it would compare favourably with other services already
offered
through the payroll, eg the deduction of trade union
subscriptions.
3. Donations_to_Unemployed_Centres
3.1 The Secretary of the Hampshire Joint Trade Union Committee,
on behalf
of a number of its constituent trade unions, asked the
County
Treasurer in December 1985, to make provision within the
payroll
system for making deductions from the pay of employees
wishing to
make voluntary contributions to Unemployed Centres.
Unemployed
Centres are voluntary organisations whose aim is to provide
support
services to the unemployed, and who are now finding
difficulty in
maintaining their services through lack of funds. The trade
unions
have pledged practical and material support to maintain the
services
provided by Unemployed Centres.
3.2 Currently, the County's policy is to make deductions from
pay only
for schemes which are of direct relevance and benefit to the
employees concerned. Examples of these are trade union
dues;
savings; Council rents and rates; staff amenity fund etc.
The County
Treasurer declined the request, which would create a
precedent for a
much wider range of deductions, which at that time would
have put
undue pressure on the County's payroll systems.
3.3 Further consideration was given to this request at the Joint
Staff
Committee in June. Whilst the new payroll system is now
technically
capable of a wider ranger of deductions, the provision
requested by
NALGO remains outside the current policy of only making
deductions
from pay which are of direct relevance and benefit to
employees.
3.4 Since that meeting, NUPE, on behalf of the Hampshire Joint
Trades
Union Committee, has made a further request for a scheme in
which the
County Council would be asked to make a single payment of
such
payroll deductions to a fund which is being established by
the South
Eastern Regional TUC, called the "Hampshire and Isle of
Wight
Unemployed Centres One Fund for All". This will be
administered by a
management committee to whom all donations collected through
the
payroll would be sent. The management committee would then
be
responsible for distributing the donations to all registered
TUC
unemployed centres and groups within the region.
3.5 This scheme is different from the "payroll giving" scheme
described
above. The regional TUC are looking to introduce the scheme
before
1st April 1987 and therefore donations would not attract
income tax
relief.
3.6 The TUC have investigated this position but do not feel that
it would
be appropriate at this stage to apply for registered charity
status.
There would therefore be a period when two types of payroll
deduction
scheme are required: one for taxed income for unemployed
centres; and
another from non-taxed income for the payroll giving schemes
for
charity.
3.7 Although the administration of the scheme would be simpler
than the
previous proposal, the basic objection, as set out in
paragraph 3.2,
remains. It is not practicable to allow unlimited
deductions from
pay for any purpose and the present policy allows
considerable
benefits to employees whilst at the same time containing the
administration within reasonable bounds. Agreement to this
proposal
would set a precedent which could lead to many requests for
a whole
variety of purposes, which in turn could require invidious
and
discriminatory choices to be made.
4. Recommendations
The Sub-Committee are asked to
i) determine whether payroll deductions should be made on a
voluntary
basis to the 'Hampshire and Isle of Wight Unemployed Centres
One Fund
for All';
ii) note the proposals for payroll giving schemes for charities,
subject
to a further report when the legislation is enacted.
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