The numbers of people donating to charity through their payroll has increased for the first time since the credit crunch began.

According to data just published by HMRC, 15,000 more employees used the government’s payroll giving scheme in the year to 31 March, than in the year before.

And while the total number of donors, at 735,000, is still well below the pre-recession 2007/08 peak of 758,000, the amount donated last year was higher than ever before, at £118m.

John Howard, partner and head of charity and not-for-profit at accountancy firm Wilkins Kennedy, which obtained the data, said the recovery was good news for the sector but warned it could be short-lived if the recession continues and unemployment rises again.

Payroll giving has generated £1bn for charities since its introduction 22 years ago. However, recently the scheme has been beset by accusations that it is not fit for purpose and the government has instructed the payroll giving agencies to find ways to make it more effective and efficient. Their response is expected shortly.