Charitable donations

[Leftie]

This feels a little mercinary, but bear with me....

As a company we make charitable donations to national charities as payment in lieu for people helping with research work we do, and that seems hunky dory for HMRC as long as we stay under £10 a person ( I have a letter from the tax and VAT man saying this is OK).

I know that they usually frown on national donations because the promotional business value of the donation isn't evident for a small company, so we have tended to focus on very local charities, which they seem OK with and which stops the neighbours complaining to the council about us working from home and having daily business vistors!

Today I had an email from a client who is retiring and instead of having the usual party/leaving gift she is doing a sponsored walk for a local London charity and has invited donations through the justgiving web site. Normally I would just pop a fiver from my own pocket in the envelope and buy them a beer. In order to maintain good relations with her employer for future relations I feel we ought to donate as it will get our company name on the donations list for her senior managers to see, but the usual £5 will make us look mean so we will have to be close to what they are donating ( £50 each).

Question: is this £50 a legititmate business cost?

Edited by Leftie on Wednesday 28th March 09:26

[Eric Mc]

Charitable donations are not normally allowed as tax deductable business expenses unless the donation can be seeen to be to an organisation that might, at some time, be of benefit to the business making the donation. Examples usually quoted are "local police benevolent fund" or "local hospital".

It boils down to the standard Revenue test for allowability of expenditure - i.e. was the expense incurred wholly and exclusively for the purpose of the trade?

[Leftie]

Eric Mc said:

Charitable donations are not normally allowed as tax deductable business expenses unless the donation can be seeen to be to an organisation that might, at some time, be of benefit to the business making the donation. Examples usually quoted are "local police benevolent fund" or "local hospital".

It boils down to the standard Revenue test for allowability of expenditure - i.e. was the expense incurred wholly and exclusively for the purpose of the trade?

I think I may swing that then becauise she has emailed with the contact etails of her successor and our donation is nestled niceley between her boss and the CEO!