By Marcus Leach

Business chiefs have called on British companies to back a scheme that allows workers to give part of their wages directly to charity.

The heads of multi-million pound firms including BT and Whitbread say lack of support within the business sector is preventing the Payroll Giving scheme from delivering on its “massive potential”.

Despite being championed by Prime Minister David Cameron as part of his Big Society drive, the take-up of Payroll Giving — a tax-free way for employees to donate to good causes — has slumped for the third year running.

Figures obtained under the Freedom of Information Act show the total number of people involved in payroll-giving schemes within the UK now stands at 720,000 — down 4,000 on 2010 and representing just three per cent of the work force.

The figures show a stark contrast to the situation in America, where almost one third of employees regularly give through their payroll.

The scheme's 'failure' to be more widely adopted within the workplace has led to calls for it to be abolished, with a new report into charity fundraising written by Professor Adrian Sargeant of the University of the West of England labelling Payroll Giving as no longer “fit for purpose”.

Businesses that employ the scheme, however, argue it is still the “most effective” way to give to charity and are appealing to employers across the UK to join the estimated 10,000 businesses already offering payroll giving.

“Payroll Giving is the simplest and most effective way to give to charity, both for employers and employees, and has been promoted by the government as a great way to boost charitable giving overall," Chairman of BT Group Sir Michael Rake said.

“BT alone raises £3.5m for charities through Payroll Giving every year, but many more British businesses need to get behind the scheme if it is ever to truly deliver on its massive potential.

Whitbread CEO Andy Harrison said: “At Whitbread we are very proud of our Payroll Giving scheme which is an important part of our broader ‘Good Together’ CR programme.

“Over 20 per cent of our team members have chosen to donate regularly in this way as it's easy and tax efficient. I would encourage every employer to be a force for good by helping their people support the charities of their choice in this way.”

Last year, some £53 billion was raised by UK charities. Gift Aid donations alone topped £1 billion while payroll giving raised over £114 million.

Cash is still the most common way of giving money to charity, accounting for half of all donations, followed by direct debits and buying goods from charity shops.

Charities and businesses, however, have been keen to push Payroll Giving as the preferred way of giving to charity because donations are tax-free and in some cases matched by employers.

But it's not only business leaders who want to see greater support of the scheme.

A new survey conducted on behalf of Payroll Giving in Action reveals that over three-fifths of British workers (61 per cent) believe employers should offer the scheme to staff.

A spokesman for the organisation, which polled 2,000 adults, said it sent a clear message to businesses that there was still “tremendous support” for payroll giving.

“The poll shows that despite having its critics, Payroll Giving still has tremendous support among members of the public," Founder Jeremy Colwill said.

“It is now up to businesses both big and small to listen to their staff and promote the scheme within the workplace. Their involvement is key to the survival and future success of payroll giving.”

As a result of its findings, Payroll Giving in Action, based in Barnstaple, Devon, has launched a tax-free, bespoke Payroll Giving web sites for every employer and charity including a secure online donation form and user-friendly smart phone app called Giving Online and GO Mobile.

Charities including Clic Sargent and Children in Need, and companies including Whitbread — a winner in the recent National Payroll Giving Excellence Awards held at No. 11 Downing St — have already trialled the new Payroll Giving Online services, which are aimed at businesses and their employees.

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