A separate review into Payroll Giving SME Grants Programme will also be carried out. The scheme has been criticised by South West Charitable Giving as a system open to abuse by sole-traders, who can claim £300 in return for giving one pound for just one month and saw four million in grants returned to the Government.
The Institute said that 3,380 companies equating to 198,508 people have signed up to Payroll Giving as a result of the SME programme.
Payroll Giving generates approximately £86m for charities, yet is only used by up to 3 per cent of employees on PAYE. About 620,000 people use the Payroll Giving schemes, which are made available to between five and seven million people.
“The Institute of Fundraising believes that, in principle, Payroll Giving is a regular and reliable form of tax-effective giving,” said Lindsay Boswell, chief executive of the Institute of Fundraising. “The scheme enables employees to give to any UK charity straight from their salary, and to receive immediate tax relief.”