Close video

Donating to charity and sponsorship

Monday 13th October 2014

Charitable donations made from your Ltd Company to a registered charity are always a tax deductible payment. The charity enjoys 100% of the donation and your company enjoys 20% Corporation tax relief.

By making the donation through your company you are also avoiding having to draw the funds out of the company through a salary or a dividend payment and therefore not suffering an income tax or National Insurance charge.

Sponsorship

Sponsorship is a little bit more tricky. Common sense must be used here to avoid the potential pitfalls and ensure that the payment is tax deductible.

Sponsorship is an allowable expense if it is purely for commercial reasons, for example; if you work mainly for large blue chip companies as a management consultant and sponsor a racing car which races all over the UK in a national championship then there is every likelihood that a potential client could see your sponsorship - it has commercial benefit and therefor this payment would be tax deductible.

However if we take the same management consultant and he sponsors his local village under 15s cricket team who coincidentally his son plays for, it would be very difficult to argue that this is a commercial benefit to the contractors limited company and therefore it would not be tax deductible. HMRC may also argue that the contractor is enjoying the benefit of this sponsorship and therefore a benefit in kind charge could be imposed on the contractor.

If you have any questions about donations to charity, sponsorship or any other expenses, please do get in touch today - always happy to answer your questions.

Share This


GO

Popular Tags

IR35 (9) VAT (11) HMRC (49) Expenses (17) Dividends (11) Corporation Tax (19) Income Tax (34) Inheritance Tax (4) Self Assessment (27) PAYE (14) National Insurance (12) Annual Return (2) Companies House (9) Salary (12) Limited Company (56) Accounts (6) Company Secretarial (4) Insurance (6) Pensions (11) Mortgages (14)

Recent Articles

Budget 2018 Tax efficient salary and dividends in 2018-19 Pension contributions directly from your limited company Employer's National Insurance Allowance Budget 2016

Archive

August 2011 (1) October 2011 (1) November 2011 (1) March 2012 (1) March 2013 (3) May 2013 (1) June 2013 (18) July 2013 (5) September 2013 (1) October 2013 (4) November 2013 (5) December 2013 (5) January 2014 (4) February 2014 (5) March 2014 (5) April 2014 (4) May 2014 (4) June 2014 (4) July 2014 (4) August 2014 (3) September 2014 (4) October 2014 (4) November 2014 (8) January 2015 (3) February 2015 (3) March 2015 (2) April 2015 (3) May 2015 (3) June 2015 (3) July 2015 (3) August 2015 (3) September 2015 (3) October 2015 (3) November 2015 (2) December 2015 (3) January 2016 (4) February 2016 (3) March 2016 (1) April 2016 (1) August 2018 (2) November 2018 (1)