Sponsorship v Tax

[drifting]

Hi Folks

Have become the treasurer of a local football club (19 teams - 250 players)and was wondering about the tax allowance for sponsorship. If someone was to sponsor 1 team at about £350 for kit with their company name on is it 100 percent allowable as advertising and does the same apply if I was to get a deal with a company to sponsor all 19 teams kit.

So anyone in the Southend on Sea area that wants to see their company name advertised around the local area mail me.

Drifting :)

[Eric Mc]

Yes, basically.

If the sponsorship is at arms length (i.e. the sponsoring company or business has no beneficial relationship with the football club) then they should be able to claim the sponsorhip costs as legitimate business expenses.

[cirks]

Eric Mc said:

(i.e. the sponsoring company or business has no beneficial relationship with the football club)

If I were to be a pedant, the above is not sponsorship anyway! Sponsorship by definition includes a beneficial relationship between the sponsor and the sponsored (ie the sponsor expects something back for the money - eg name on shirts, promotional activities etc).....If the company just gives money then it is patronage. Names on shirts etc or around ground could be called advertising if nothing expected back from it... (thin line distinguishing the two..)

I knew my MA disertation on local sports club sponsorship would come in handy one day ;-) Then again, that was 15 years ago so I've probably forgotten what I wrote!

[singlecoil]

cirks said:

Eric Mc said: (i.e. the sponsoring company or business has no beneficial relationship with the football club) If I were to be a pedant, the above is not sponsorship anyway! Sponsorship by definition includes a beneficial relationship between the sponsor and the sponsored (ie the sponsor expects something back for the money - eg name on shirts, promotional activities etc).....If the company just gives money then it is patronage. Names on shirts etc or around ground could be called advertising if nothing expected back from it... (thin line distinguishing the two..) I knew my MA disertation on local sports club sponsorship would come in handy one day ;-) Then again, that was 15 years ago so I've probably forgotten what I wrote!

I think Eric is right, advertising is a legitimate business expense, whether it's your name on some footballers or your name on the back of a bus. Therefore fully allowable tax wise

[drifting]

Thank you for that gents, now all I need is to find is someone to sponsor the whole club.

Drifting

[jacobyte]

On the sponsorship issue -

Let's say a friend of mine is a director of a company. If his company pays £x,000 to a race team to place its logo on a race car, is that deductible, even though he will be racing the car?

[Eric Mc]

Extremely debateable. The arrangement is not at arms length and could very well be construed as a Benefit in Kind on the Director.