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Appendix: Example of how the arithmetic works
Iâm borrowing this example from the Payroll Giving topic page:
The way they actually get the ÂŁ300 into your bank account is by adjusting your tax code, which means you pay less tax for the rest of the year.
In a tax code like 1257L, the 1257 means you pay zero tax on the first ÂŁ12,570. Changing this to e.g. 1258L effectively shifts all the tax bands up by ÂŁ10, so if the highest band you were in was 40% this gets you an extra ÂŁ4.
In the above case, they would add ÂŁ750 to the tax-free allowance, to save you 0.4ĂÂŁ750=ÂŁ300. So this would change your tax code from 1257L to 1332L (equal to 1257+75)
You can use this to check theyâve done the adjustment correctly when you talk to them over the phone. It should be the case that:
0.4Ă(difference between old and new tax code)ĂÂŁ10=0.25Ă(gross donation amount)