What is a Deed of Covenant (DOC) and how can it help St Columba's?
A DOC is simply a contract where by a person promises to pay to St Columba’s a fixed amount each year over an agreed period of time (5 years).
The benefit comes from the fact that any tax already paid on that amount can be claimed back from the Comptroller of Income Tax by St Columba’s.
Here is a simple example:
Mr Jones feels able to give £10 each week, being a total of £520 each year
(£10 x 52 weeks)
If he signs a DOC this allows the Church to claim back the tax that Mr Jones has paid.
How much is that? With tax in Jersey at 20% Mr Jones must earn £650 to be left with £520. (The Comptroller takes £130).
With a DOC in place the Church applies to the Comptroller who will then pay the £130 to the Church.
The procedure is simple but the effect for our Church is significant.
With tax at 20%, for every £100 given under a DOC the church can claim back a quarter of that.
Some people are reticent to make such a promise; ‘What if my personal circumstances change and I am unable to make the payment every year?’
If you are concerned you would be advised to take out a DOC only for an amount you are comfortable with. Mr Jones may have been giving £10 each week into the collection plate but he could take out a DOC for half that amount. The Church can only get ‘tax back’ on the £5/week but, if he feels able there is nothing to stop Mr Jones giving the other £5/week (or any amount) into the plate to help with God’s work.