NO matter where you live, if your income is subject to UK taxation there could be advantages to both the donor and to the charitable recipient.
This can normally be effected by one of two simple methods, both of which are recognised by the Inland Revenue.
a) The Payroll Giving Scheme
Regular donations to the charity of your choice are deducted from your pay before your employer calculates your PAYE tax and you will pay tax only on the net amount after the gift has been deducted.
b) Deed of Covenant Scheme
This is a way of giving to charity on a longer term basis. You have to sign a Deed of Covenant form, which can be legally binding, that you will for a period of more than three years pay to the nominated charity the sum of say £100 every year for 5 years. If you are a taxpayer you are entitled to tax relief on the payment. You get the relief by deducting and keeping basic rate tax of £25 from the payment and you pay over to the charity £75. The charity then claims back from the Inland Revenue the tax you have deducted, so it gets the full £100 due under your covenant.
The above example is a covenant drawn up in "gross" terms.
The more usual way is to draw up a net of "tax" covenant.

Let us say, for example, that you want to give the charity an amount which will cost you £75 a year after taking your basic rate tax relief 25 percent into account.

The first step is to sign a covenant under which you undertake to pay the charity every year "such a sum as after deduction of tax is equal to £75".
The next step is that you pay the charity the £75 each year. But this is really worth a payment of £100 from which you have deducted tax, (at the basic rate of 25 per cent). As long as you are already paying at least this much in tax, you need do nothing more. But the charity can claim the tax back so it gets the full £100: £75 from you and £25 from the Inland Revenue.
In the examples above it should be noted that amounts covenanted to charities can be paid on a yearly, six-monthly, quarterly or even monthly basis to suit you, the donor.
If you should require a Form of Deed of Covenant for yourself or your business, please complete the coupon below.
To:        QVS APPEAL OFFICE
Army Headquarters Scotland PO Box 85 Edinburgh EH1 2YX
Please send me a Deed of Covenant Form for me / my business.

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