Sponsorship / donations from Ltd Co

[MrLoveBucket]

Thanks all for your input.

Perhaps I shouldn't have mentioned my own kids are involved as it does muddy the waters.
The money would simply go into the pot at the rugby club for general needs such as training the coaches, buying equipment etc.
I will not benefit directly or indirectly and neither will my company.
Without such cash input / sponsorship (on top of subs) the club simply isn't viable.

Basically I want to my company, from its post-corporation tax profits, to give some money to a local community organisation - ie use option 2 in my original post. I'm not (now option 1 is discarded) looking at this as a way to reduce my CT.

As a director isn't it up to me what I do with my company's money once all CT and other liabilities are met?

If I want to withdraw all my post tax profits as cash and burn it on the street rather than pay it to myself as dividends isn't that my business as the director? An extreme example I know but it illustrates the point. What would HMRC's view be of that?

[Jessica@WhiteFieldTax]

An extreme example I know but it illustrates the point. What would HMRC's view be of that?

Well, a company as a non natural person cannot light a match, so I would suggest that its dividends you've taken out and burned in the street. That's 7.5% please.

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In the substantive issue, my view is that people tend to stress too much in small issues like this. HMRC are unlikely to query it in a simple cost/benefit basis. "Sponsorship" becomes a problem with big ticket stuff - horses, cars, boats - or obvious extravagance / entertaining value.

I remember my first interview for an accountancy job, 31 years ago - the guy said "Accoutancy is an art not a science let people don't appreciate that".

The art is different depending on whether it's £500 / £5,000 / £500,000.

[northernladuk]

Thanks all for your input.

Perhaps I shouldn't have mentioned my own kids are involved as it does muddy the waters.
The money would simply go into the pot at the rugby club for general needs such as training the coaches, buying equipment etc.
I will not benefit directly or indirectly and neither will my company.
Without such cash input / sponsorship (on top of subs) the club simply isn't viable.

Basically I want to my company, from its post-corporation tax profits, to give some money to a local community organisation - ie use option 2 in my original post. I'm not (now option 1 is discarded) looking at this as a way to reduce my CT.

As a director isn't it up to me what I do with my company's money once all CT and other liabilities are met?

If I want to withdraw all my post tax profits as cash and burn it on the street rather than pay it to myself as dividends isn't that my business as the director? An extreme example I know but it illustrates the point. What would HMRC's view be of that?

Support your kids and the club and forget the tax element. There is more in life to worry about. Don't let the tax tail wag the dog.

[Iliketax]

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.

Is it a CASC? You can get gift relief with that - https://www.gov.uk/government/public...guidance-notes

If not, what about helping making it one?

[WordIsBond]

Is it a CASC? You can get gift relief with that - https://www.gov.uk/government/public...guidance-notes

If not, what about helping making it one?

Great artistic idea.

[TheFaQQer]

As a director isn't it up to me what I do with my company's money once all CT and other liabilities are met?

Yes.

The problem that you will have is determining accurately what the liabilities and CT are and making sure they are paid for properly.

[SouthernHarrier]

I sponsor a barrel of beer at my rugby club annual beer festival. Have never worried about to be honest. My eldest has just started mini rugby so I hope he's not benefiting from this!!

[BrilloPad]

I sponsor a barrel of beer at my rugby club annual beer festival. Have never worried about to be honest. My eldest has just started mini rugby so I hope he's not benefiting from this!!

Why not pay it personally? Why attract attention to your limited?

[vwdan]

Why not pay it personally? Why attract attention to your limited?

Because you're saving ~45% tax by being able to spend it using your companies pre-tax income?

[BrilloPad]

Because you're saving ~45% tax by being able to spend it using your companies pre-tax income?

Agreed. However there is clearly a fine line involved here. Read the posts above. I try to get as little attention paid to my tax affairs as possible these days. So do several others I know having been bitten before by trying to push the envelope.

I suspect the most HMRC will do it denote it as a BIK. However they might dig further.