Sponsorship...

[Gibson70]

What is the tax implications if I pay 15 shirts to a youth club team of which I sponsor from my company?

Thanks

SG

[Eric Mc]

Fully claimable - and you can recover the VAT if VAT is being charged on the shirts.

I am assumimng your business' logo will be on the shirts.

Edited by Eric Mc on Tuesday 23 February 11:39

[Gibson70]

Thanks Eric Mc.

Yes, business logo on the shirts

SG.

[Eric Mc]

The main concern HMRC have with spnsorship is whether any of the directors or proprietors of the business are going to receive any direct benefit from the payment to the club or sporting entity. What they are on the look out for is "self sponsorship" or sponsorship of a "connected person" (such as a child or spouse/partner).

However, if you had a son or daughter playing for a club that you wanted to spnsor they would not look on this as "self sponsorship".

[bobo]

that's interesting ...

to expand on this theory .... so if i sponsored my friends kart for the season (full co logos etc) that would be ok as i don't derive a personal benefit?

in turn he could reciprocate and sponsor (his full co logos on mine) my kart for the racing season?

directly there is no personal benefit ... especially as his logos are terrible ??!

[pcourt400]

I think that strictly speaking this would be an expense not wholly and exclusively incurred for the purposes of the trade and therefore not an allowable tax deduction. However, whether or not the friendly tax man would notice is another question altogether.

[singlecoil]

Best way to do sponsorship is to be a big cheese in a PLC, then you will get to be a special guest in the pits at Monaco, view the race from the corporate hospitality area, and have your shareholders pay for it all. Oh, and get your name on one of the cars too.

[Eric Mc]

pcourt400 said:

I think that strictly speaking this would be an expense not wholly and exclusively incurred for the purposes of the trade and therefore not an allowable tax deduction. However, whether or not the friendly tax man would notice is another question altogether.

I wonder do all those companies that sponsor Premiership football club shirts agonuise over this aspect of their expenditure?

I do not think that the OP would have any problems with getting tax relief on sponsoring the club. What other reason does he have for sponsoring them other than promoting his business?

[pcourt400]

Sorry, was replying to Bobo's post should have made that clear. I'd agree that in the OP's circumstance it appears to be entirely reasonable.

[kryten]

But if his son plays for the club, doesn't it depend on what his business is?

Ours is wholesale telecoms (nothing retail at all) and so this situation would be very hard to justify to HMRC because it is highly unlikely the company would derive any benefit from it...

[Eric Mc]

I honestly don't think HMRC will go to that extent to block such a claim.

Farnborough FC's (a Zamarretto League club) is sponsored by computer company Medion, including the shirts. I hazard a guess that Medion do not get a massive amount of sales out of this sponsorhip (the average crowd Farnborough plays in front of is around 500 and there is curently no TV coverage of their matches). At what point do you think HMRC would step in and say "ABC FC" is OK to be sponsored but "XYZ FC" is not?

Edited by Eric Mc on Thursday 25th February 09:19