Charity

[expat]

Pay it out of dividend income then.

Don't have any. The question is about how MyCo Ltd gives to charity, not about how MyCo Ltd pays me.

Just talked to accountant. Perfectly OK. "Better" to get a receipt.

[NotAllThere]

Yes it does: I am in effect giving the tax and NI (including employer's) to the charity as well.

Pay it out of dividend income then.

[expat]

Sorry, I misread your post. However, I would be interested in finding out. So I may speak to my accountant about it. I know a friend of mine who owns a reseller does donate some money from his business to charity... and I may ask him when I get the chance.

Would be good to post it: I'm sure that many of us give to charity sometimes, and the thought of co-opting some of Darling's cash is just too good to miss.

[pmeswani]

No, that is exactly my question. If I just send a cheque from the Company bank account, is that taken to be:
1. something allowable that the company did, so that money is not counted in profit or in salary.
or
2. something permissible but it still forms part of the Company profit, therefore liable to CT.
or
3. something I personally would be considered to have done, i.e. that money will be taken as having been a net salary payment, therefore income tax and NICs will have to be back-calculated on it.

As I say, I don't know, that's why I am asking. It is arithmetically self-evident that if #1 is the case, then I can give more to the charity for a given cost to me.

Sorry, I misread your post. However, I would be interested in finding out. So I may speak to my accountant about it. I know a friend of mine who owns a reseller does donate some money from his business to charity... and I may ask him when I get the chance.

[expat]

If you pay personally, charities can normally claim back Gift Aid from the government which works out as around 30% on top of what you give... essentially they are claiming back all the tax that was paid on this in the first place.

Thanks but I do know that. But this does not allow the charity to claim back all that MyCo Ltd and I have paid to HMRC on this money: Employer's NICs, Employee's NICs, and 40% income tax.

[d000hg]

If you pay personally, charities can normally claim back Gift Aid from the government which works out as around 30% on top of what you give... essentially they are claiming back all the tax that was paid on this in the first place.

[expat]

My company sponsored my wife in her race for life charity run. I just wrote out a company cheque and the accountant was fine with it.

Thanks. As usual, I think I'll ask my accountant.....

[expat]

I have been thinking about doing something similar myself... but didn't know about the tax advantages of doing so. I don't suppose you have any web references to back up the tax & NI benefits?

No, that is exactly my question. If I just send a cheque from the Company bank account, is that taken to be:
1. something allowable that the company did, so that money is not counted in profit or in salary.
or
2. something permissible but it still forms part of the Company profit, therefore liable to CT.
or
3. something I personally would be considered to have done, i.e. that money will be taken as having been a net salary payment, therefore income tax and NICs will have to be back-calculated on it.

As I say, I don't know, that's why I am asking. It is arithmetically self-evident that if #1 is the case, then I can give more to the charity for a given cost to me.

[FiveTimes]

My company sponsored my wife in her race for life charity run. I just wrote out a company cheque and the accountant was fine with it.

[pmeswani]

Yes it does: I am in effect giving the tax and NI (including employer's) to the charity as well.

I have been thinking about doing something similar myself... but didn't know about the tax advantages of doing so. I don't suppose you have any web references to back up the tax & NI benefits?

[expat]

I believe so. But does it make any difference if your company does it or you do?

Yes it does: I am in effect giving the tax and NI (including employer's) to the charity as well.

[NotAllThere]

I believe so. But does it make any difference if your company does it or you do?

[expat]

Can MyCo Ltd give a modest sum to charity, just like that, straight off the top with no tax liability for it?