Giving to charity
If you give money using the lump sum donation scheme the charity gets an additional 25%. So if you donate £100, the charity will get an additional £25.
The following rules apply to the donation:
- the minimum single amount is £50 (also see payroll giving, below)
- the charity must have been exempted from income tax and established in Jersey
- you should be liable to pay income tax (see below if you do not pay tax)
- you must be resident in Jersey for tax purposes on the date you make the donation
- it is made in money
- it is not subject to a condition that any part of it can be repaid
- it is not due under a deed of covenant
- it is not part of an arrangement to benefit you, your family or any individual or company connected to you
- it is not linked to the acquisition of property by the charity except by way of a gift
- when added to other lump sum donations by you or persons connected to you, the total does not exceed £500,000 in any one calendar year
The lump sum donation scheme
You make a payment to the charity (in cash, by cheque, bank transfer or credit card). You give the charity a lump sum donation certificate so that it can claim an additional amount from the taxes office.
Download lump sum donation form (size 192kb)
- you give £800 to a local charity
- this is treated as a gross payment of £1,000 less £200 tax (at 20p in the £)
- the charity, being exempt from income tax, can claim the tax of £200 so your donation of £800 is worth £1,000 to the charity
Giving a lump sum through your payroll
Employee information for lump sum donations through payroll
You can make donations to a nominated charity directly from your salary.
If the accumulated amount over the year is £50 or more, the donation will qualify as a lump sum donation.
It is an easier way to give, as your employer will administer the scheme and you can spread your charitable giving over a year.
- you join an employer who have a lump sum donation payroll scheme, so you set up a £10 per month donation direct from your salary from January to December
- the employer sends your donation to the nominated charity in December
- as the donation is over £50 it qualifies as a lump sum donation
- the charity will receive your £120 plus an additional £30 from the Taxes Office
Your payroll will still provide your gross income (the amount before the charity deduction) to the Taxes Office and this is also the amount you must declare on your annual tax return.
You should also enter the details of the donation, along with any other qualifying donations to Jersey charities, on your personal tax return.
As your employer administers the scheme, the decision to operate a lump sum donation payroll scheme or not is theirs.
Download lump sum donation payroll scheme form (size 31kb)
Employers information for lump sum donations through payroll
When you set up a lump sum donation payroll scheme you must ensure that the nominated charity is established in Jersey and exempt from income tax. The charity will be able to provide a letter from the Jersey Taxes Office confirming they 'are exempt under Article 115(a)' as proof of this.
Each employee must complete a lump sum payroll donation form and when the total collected is distributed to the nominated charity it must include a schedule detailing the following information for each employee who has donated:
- tax reference
- amount donated to that charity through the scheme for the year
As you are responsible for the administration of the scheme, the decision about how a charity is selected and whether you have more than one chosen charity for the year rests with yourself.
If you do not pay income tax
If you are below the tax threshold, exempt from income tax or a zero rated company you should not use these schemes, but just pay the charity the amount you want it to receive.
If you do make a payment using the above schemes you will have to pay income tax of the amount that the charity receives from the taxes office.
A 10% company would need to pay half of the amount the charity claims back.
Fund-raising events, collections and sponsorship
These do not qualify for the lump sum donation scheme as you are passing on money from other people that you have already collected. It is therefore not your gift.
However, if at the time an individual wants to give the charity you are raising money for an amount under the lump sum donation scheme and the donation meets all the rules then they can do this.
The donor must be aware and acknowledge that they are making a payment under the lump sum donation scheme and it is their responsibility to complete the form. You can then pass on the donation to the charity.
If a company sponsors fundraising events organised by local charities and it benefits from the publicity, or in other ways, the payment will not qualify as a lump sum donation.
Trusts, estates and partnerships
Trusts, estates or business partnerships can't use the lump sum donation scheme. However a business partner, as an individual, can make a donation on their own account.