SUBSCRIPTIONS UNDER COVENANT
[To the Editor .of THE SPECTATOR] SIR,—We are all accustomed to receiving appeals from Charitable Institutions to sign a covenant by which we are led to understand that the charity benefits by obtaining a refund of income tax without any detriment to the subscriber.
I have, like many other people, changed my Banker's Orders into deeds of covenant, believing that the charity would • benefit to the extent of 6s. on every guinea, but not realising that I have to pay almost all of that benefit. If one is a sur-tax payer one is entitled, I understand, to obtain personal relief as a result of these charitable subscriptions. If, how-
ever, one's income is earned income the Inland Revenue Authorities charge up the gross amount of these covenanted subscriptions (i.e., every guinea is charged at 27s.) and deduct these gross totals from the earned income allowance. Thus the subscriber pays, in addition to his guinea subscription, almost the whole of the refund which the organisation recovers from the Inland Revenue Authorities.
It seems to me that charities should, in the light of this procedure, re-word their appeals for covenanted subscrip- tions and make it clear to the subscriber that he is being asked to increase his subscription very materially. He may be willing to do this, but he ought to be told what he is letting himself in for.
For my part, I am taking steps to cancel all my covenanted agreements and replace them by Banker's Orders; as I have an uncomfortable feeling that I have been tricked.—I am, Sir,
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