Charitable donation via company accts
Discussion
I am going to give a charitable donation to my daughters school, but pay it from my company hence pay it out of pre tax profits. Can I still tick the "giftaid" type box? Is there anything else I can do to maximise the offering?
Also, do I need a receipt to show the accountant at the year end?
Ta
Also, do I need a receipt to show the accountant at the year end?
Ta
I don't think that charitable donations paid by a limited company are eligible for Gift Aid relief.
Furthermore, the company cannot claim the charitable donation as an expense against its business income. In other words, it will not get any reduction in its Corporation Tax bill by making a donation to charity.
Furthermore, the company cannot claim the charitable donation as an expense against its business income. In other words, it will not get any reduction in its Corporation Tax bill by making a donation to charity.
Eric Mc said:
Furthermore, the company cannot claim the charitable donation as an expense against its business income. In other words, it will not get any reduction in its Corporation Tax bill by making a donation to charity.
I asked my accountant the same question last year and he charged me for the advice, so it cost me corporation tax and accountant tax! 
It seems a bit harsh that the expense isn't an allowable business expense, it doesn't encourage charitable giving.
Correct.
There are some very limited situations where a BUSINESS can offset a charitable donation against its profits.
If the charity can confer some use to the business - such as a local fire station or a police benevolent fund or a workers benevolent fund, then the expense can be claimed under the "wholly and exclusively for the purpose of the trade" rule. Otherwise, charitable donations do not tend to be "for the purpose of the trade" and therefore cannot be claimed.
A payment to a charity for advertising space or sponsorship of an event WOULD be allowable under the "wholly and exclusively" rule.
Note that I used the word "business" - so this applies to limited companies, sole traderships and partnerships.
There are some very limited situations where a BUSINESS can offset a charitable donation against its profits.
If the charity can confer some use to the business - such as a local fire station or a police benevolent fund or a workers benevolent fund, then the expense can be claimed under the "wholly and exclusively for the purpose of the trade" rule. Otherwise, charitable donations do not tend to be "for the purpose of the trade" and therefore cannot be claimed.
A payment to a charity for advertising space or sponsorship of an event WOULD be allowable under the "wholly and exclusively" rule.
Note that I used the word "business" - so this applies to limited companies, sole traderships and partnerships.
I have had donations to national charities bounced by by acountant because I couldn't show the business benefit.
However, he was comfortable with our sponsorship of £250 to a very local charity where we got a mention in their news letters and our name on specific things they bought with the donation ( a local bench). I see in the accounts it came up as 'advertising' which is what it is ( well it keeps the locals off our backs and stops them moaning about early morning TNT deliveries).
It's that old "Wholly and exclusively" theme at work again.
There is nothing to stop companies making charitable donations to any legitimate charity. It's just that neither the charity nor the company will be able to obtrain any tax relief on the donations.
Of course, the government would say that companies should be willing to support charities irrespective of the tax regime.
There is nothing to stop companies making charitable donations to any legitimate charity. It's just that neither the charity nor the company will be able to obtrain any tax relief on the donations.
Of course, the government would say that companies should be willing to support charities irrespective of the tax regime.
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