Commentary on Sections Omitted material Overview Section 713: Donations to charity: payroll deduction scheme
2899.This section describes the arrangements between the person it characterises as “the payer” and the individual from whose PAYE income that payer withholds the donations. The section derives from section 202(1) and (2) and part of (5) of ICTA.
2900.Subsection (1) sets out the basic circumstances for payroll giving to be possible. An individual asks the person making payments of PAYE income to him or her to deduct authorised charitable donations from those payments. Tax relief is available on the donations made.
2901.Subsection (2) removes the possibility of circularity in the operation of this section.
2902.Section 202(2) provides that the donations “ … shall … be allowed to be deducted as expenses incurred in the year of assessment in which they are withheld”. Under the structure of this Act, the amounts that are withheld do not need to be characterised as “expenses”. Subsections (3) and (4) simply refer to a deduction being allowed in calculating the amount of the individual’s income that is charged to tax. The particular manner of that deduction depends on the type of income from which the amount is withheld and is described in subsection (4). Those provisions refer to deductions being allowed in calculating “net taxable” earnings/income of the specified type for “the relevant tax year”. That fixes the tax year in which the deduction is due to that in which the income (from which the amount is withheld) is charged to tax. See Change 154 in Annex 1.
2903.Subsection (5) defines “relevant tax year” for the purposes of parts of the preceding subsection.