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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: net pay arrangements: payroll giving schemes for charities - action required

Where a Payroll Giving scheme is in operation you should

  • ask to see the employers contract with the PGA

Where the employer fails to produce a copy of the contract you should

  • telephone HMRC (Charities) ((This content has been withheld because of exemptions in the Freedom of Information Act 2000) ) for confirmation that authority has been notified to them.

For five in the scheme or all employees if less than five you should

  • check that

    • the employer holds a written authority to make deductions
    • PAYE is being operated on a ‘net pay’ basis but NIC is calculated on the true gross pay

if no PGA receipts are available the PGA has received specified remittances (say two). HMRC Charities will provide contact numbers for PGAs.

As the employer should pay the donations to the PGA within fourteen days of the end of the Income Tax month in which they were deducted the payment is likely to coincide with the remittances to AO you should

  • total all charitable donations for the same month as that chosen for the remittance check (COG905265)
  • agree the total deductions with the cash book entry for that payment to the PGA
  • check that the payment was made to the PGA by the required date.

As a further check

  • select a cash book entry for payment to the PGA
  • agree the amount back to the payroll records
  • compare the entry with the PGA receipt (if held).

Where Agency receipts are held

  • compare two further remittances to receipts without tracing them through the records
  • compare the remaining receipts held to the appropriate cash book entries.