Was just chatting to my accountant about this and thought it might be useful info for some others on here too (although this may be an unusually altruistic topic for this forum...)
My kids both play for the local rugby club and I want to make a donation from my Ltd Co to the club. The club is not a registered charity.
Two options for this are:
1) Sponsorship as an advertising cost. If you could justify to HMRC (in the event of an investigation) that having your company name emblazoned across club literature/ internet sites / balls / kit etc would bring in x amount of business based on y amount of outlay then this can be put through your business accounts as advertising spend. This would be an allowable expense from a corporation tax point of view.
2) If you couldn't justify it as above, then it's just a 'sundry' item which wouldn't benefit from corporation tax relief.
Of course, putting it through the business either way still avoids any personal tax liability on the amount donated.
I'm guessing the situation might be different where the beneficiary is a registered charity.
In my case I'm only talking about a reasonably small amount (£500) so it probably wouldn't attract much attention from HMRC anyway (unless they are reading this). I'm just trying to decide my risk appetite and therefore which of the above options to go with.
Any thoughts anyone?
My kids both play for the local rugby club and I want to make a donation from my Ltd Co to the club. The club is not a registered charity.
Two options for this are:
1) Sponsorship as an advertising cost. If you could justify to HMRC (in the event of an investigation) that having your company name emblazoned across club literature/ internet sites / balls / kit etc would bring in x amount of business based on y amount of outlay then this can be put through your business accounts as advertising spend. This would be an allowable expense from a corporation tax point of view.
2) If you couldn't justify it as above, then it's just a 'sundry' item which wouldn't benefit from corporation tax relief.
Of course, putting it through the business either way still avoids any personal tax liability on the amount donated.
I'm guessing the situation might be different where the beneficiary is a registered charity.
In my case I'm only talking about a reasonably small amount (£500) so it probably wouldn't attract much attention from HMRC anyway (unless they are reading this). I'm just trying to decide my risk appetite and therefore which of the above options to go with.
Any thoughts anyone?
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