Tax position on doing work for a charity

[RacingPete]

I have been building a website for a charity over the last few months, and happy to give my time and expertise to help them with this. I will then not bill them for the hosting costs, and while it's not huge a month I wonder what I can claim or not for tax purposes.

Can I claim the hosting costs as a charitable donation? Or just take the costs to the bottom line for my profit for tax purposes?

Thanks in advance for any help.

[keith333]

You need to give a bit more info about your personal position. If you have a permanent job and this is something you're doing in your spare time, then you can only offset costs against profits for tax purposes i.e. you can't claim these hosting costs to reduce your tax bill. If they are paying you £2k and costs are £1k, then your taxable profit is reduced to £1k.

Note that HMRC will ignore any self-employed income of less than £1,000.

[RacingPete]

I have a full time job, but do host and charge a few companies for hosting and bits and bobs as a sole trader.

For this charity work I am not receiving any money to build or host the website, and thus am footing the hosting costs myself as part of giving back to the charity.

[Eric Mc]

If you are claiming the cost for offset against your sole trader income, then as long as the cost was incurred wholly and exclusively for the purpose of conducting that business, then it is offsetable.

Claiming charitable donations for offset against general income is nothing to do with business cost claims. It is a separate tax matter and is usually dependent on whether the donation to charity was made under the Gift Aid regulations or as a Deed of Covenant.

[RacingPete]

Thanks both, I guess I was seeing if it was more tax efficient, or possible, to gift payment of services like hosting costs, rather than to take off bottom line.

[Eric Mc]

So are you suggesting you will do the work for nothing?