Sponsorship/Tax/Ltd. company?

[polar_ben]

Currently speaking to potential sponsors for a 2004 expedition, and I'm unsure of quite how to run things financially.

I've noticed that other projects of a similar nature (expeditions, racing yachts, etc) are occasionally run through Ltd. companies, formed solely for the event/project.

The bit that's confusing me is whether the company's income (from sponsorship) is liable for tax, and whether or not this needs to be factored into my budget. The expedition will be raising money for charity, which might throw a spanner into the works.

Also, on a different note, my credit rating is shot to buggery - will this preclude me opening a business account (I won't need credit facilities)??

Thanks
Ben

[sparkyjohn]

polar_ben said:

my credit rating is shot to buggery - will this preclude me opening a business account (I won't need credit facilities)??

Preclude ? Probably not. Make trickier ?

Most high street banks now offer non-status business accounts with limited debit card and cheque facilities. Your own current account provider might be a good place to start.

There are companies that will guarantee to provide a business account, regardless of credit status, I haven't direct experience of these but I suspect that they only do legwork you could do yourself for free

[Plotloss]

Shirley if the sponsorship you recieve is eaten wholesale by the cost of the expedition then there is no tax to pay as you arent gaining anything?

[eric mc]

Companies pay Corporation on their Net Profit. If the company makes a loss, it pays no tax. Registered charities do not pay tax on their profits. You could try and get the company registered as a charity - although you would need to speak to charity experts to work out what the charitable aims of the company were. Merely donating proceeds to other charities is not sufficient for "Charitable Status".

>> Edited by eric mc on Wednesday 12th November 11:45

[Plotloss]

Dont think your credit score will prevent you opening a business account.

I opened one when I was 19 and on the dole.

[polar_ben]

Thanks chaps. Top notch PH advice, as always

[chim_girl]

Assuming all you need is a bank account with a cheque book and cash card you shouldn't have any trouble opening a standard business account. This assumes you have proof of id (passport, d/licence, utility bill). However, if you want to have any lending facilities; overdraft, visa card and in some cases debit cards, your credit history will matter.

The other thing to consider is that most banks charge for transactions through business accounts.

I work in corporate banking for one of the major banks. Once you've decided how you're going to operate (ltd co/charity etc) email me and I'll see if I can do anything to help.

Jo

[polar_ben]

Thanks Jo. I'll drop you a line soon...

[steviebee]

eric mc said:

You could try and get the company registered as a charity - although you would need to speak to charity experts to work out what the charitable aims of the company were. Merely donating proceeds to other charities is not sufficient for "Charitable Status". >> Edited by eric mc on Wednesday 12th November 11:45

The Charities Commission is a good place to start. I believe you can also register as a "not for profit" organisation in the same way that an Association or Club might.

The one spanner may be your credit situation. The Commission want to see "sqeeky clean" and you will also need a board of trustees.

Good luck!