Receiving donations
Receiving donations
Author
Discussion

mondeoman

Original Poster:

11,430 posts

297 months

Monday 3rd November 2014
quotequote all
We're organising for a bunch of idiots to do s triathlon next year as part of a team, all participants paying their own entry fees and raising money for a couple of charities through their own and the groups just giving pages.

We are also approaching local companies for sponsorship - advertising space on t-shirts, support banners and stuff like that, and just wondering how the companies could make the payments so that they are recognised as charitable donations? We're not taking anything out ourselves, just offering advertising space to cover the cost of the t-shirts.

Eric Mc

125,884 posts

296 months

Tuesday 4th November 2014
quotequote all
What are you going to do with the money when you receive it?

It seems to me that the income is normal sales income, which will be taxable and VATable if your business is VAT registered. You are essentially selling a service (advertising).

However, if you then as a business donate the money to a recognised charity, then your business can claim tax relief on the donation.

sumo69

2,164 posts

251 months

Tuesday 4th November 2014
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Your customers could get relief if they pay the individuals directly or supply the shirts for them to use - if they pay you, then Eric's comments are correct.

David

mondeoman

Original Poster:

11,430 posts

297 months

Tuesday 4th November 2014
quotequote all
No, we're not a business, just a regular couple organising a (large) group of friends and acquaintances to enter a triathlon, which is organised and run run by a company that is not linked to us in any way.

Any excess money goes straight to the groups nominated charities, we wont take a single penny out except for the T-shirts and banners, which gets paid straight to the manufacturers (again, not us).

Magic919

14,584 posts

232 months

Tuesday 4th November 2014
quotequote all
Get the local firms to make their donations out to the charity directly.

mondeoman

Original Poster:

11,430 posts

297 months

Tuesday 4th November 2014
quotequote all
Magic919 said:
Get the local firms to make their donations out to the charity directly.
That, sadly, doesn't get the T-shirts paid for.

Personally I'd just write the cheque out and put it in the books as a donation, but not sure thats entirely legit.

Eric Mc

125,884 posts

296 months

Wednesday 5th November 2014
quotequote all
What "books"?

If you are not a "business", in what capacity are you accepting and paying donations?

You were talking about placing advertising - which is what made me think you were running some sort of business.

Magic919

14,584 posts

232 months

Wednesday 5th November 2014
quotequote all
mondeoman said:
Magic919 said:
Get the local firms to make their donations out to the charity directly.
That, sadly, doesn't get the T-shirts paid for.

Personally I'd just write the cheque out and put it in the books as a donation, but not sure thats entirely legit.
It's a lot simpler if you start a charity. I'm presuming the business is paying a decent amount, relative to the T shirt costs. We'd have got the business to make it out to the charity and had an individual, that was less bothered by the donation status, to buy the T shirts. It got easier once we started an actual charity; you just have to be a bit creative before that.

mondeoman

Original Poster:

11,430 posts

297 months

Wednesday 5th November 2014
quotequote all
Eric Mc said:
What "books"?

If you are not a "business", in what capacity are you accepting and paying donations?

You were talking about placing advertising - which is what made me think you were running some sort of business.
I meant if I was running a business and made a payment for something like this I'd just take my chances and pay for it, then mark it as a donation in the business accounts (books).

UKTriathlon organises the event (one of their regular ones), we've simply cajoled about 30 people (so far, target is 100) to sign-up for one of these, with a view to them all generating donations to two charities - Cancer Research and Birmingham Childrens Hospital. As a result of the facebook and twitter exposure, some local businesses want to help with paying for team t-shirts and so on, and we're just trying to work out how they can do that in such a way that any payment they make is recognised as a donation and they can claim the relevant tax relief on it. Ideally no payments would come direct to us, we don't want to get involved in opening bank accounts or running a charity.

Eric Mc

125,884 posts

296 months

Thursday 6th November 2014
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A business can claim against tax donations it makes to charity.

Limited companies will have the cost deducted in their profit and loss account and will get a reduction in their Corporation Tax bill.

If the business is a sole trader, it might be better for the individual proprietor to make a personal donation rather than through the business.

If it is made personally, it can be made under Gift Aid and the charity will get the 20% tax relief directly from the government. If the individual is a higher rate taxpayer they will be able to get a reduction in their personal tax liability by entering the charitable donation details in the appropriate section of their self assessment tax return.

It is far better for the business or the individual to donate directly to the charity rather than have them route their donation to any sort of non-charity third party.

Magic919

14,584 posts

232 months

Thursday 6th November 2014
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They should be careful about receiving benefit in return for the money if they Gift Aid it. HMRC have rules for the value of any benefit.

mondeoman

Original Poster:

11,430 posts

297 months

Thursday 6th November 2014
quotequote all
Thank you.

So, in a nutshell, it's best for them to donate straight to the charity, and if we put their names on a shirt, paid for by us, that's our choice and they receive no benefit from their donation so they're safe.