Business donations to charity

The types of qualifying donations include money, equipment or products you sell, land, property or shares. You can also arrange secondments, allow your employees to volunteer or sponsor a charity. You can deduct all of these contributions from your business profits before you pay Corporation Tax. 

 

Money – you can donate money but can’t make loans or payments with business conditions attached or give dividends. 

 

Benefits in exchange for your donation such as event tickets mustn’t exceed certain values, according to how much you’ve given. 

These rules also apply to benefits for people and other companies associated with your business and your close relatives. 

 

Equipment and stock – you can donate equipment or things your business makes. As long as you have used equipment for business you can claim your full capital allowances. This could include office furniture, computers and printers, vans, cars, tools and machinery. 

 

If you give away stock you don’t have to include it in your sales income so you’ll get tax relief on the cost. If you’re registered for VAT, you must account for what you’ve given away although you can apply zero VAT. 

 

Land, property and shares – you can give a charity land, property or shares your company owns. Alternatively, you can sell them to a charity for less than they’re worth. However, you can’t claim for gifts or sales of shares in your own company. 

 

You’ll should contact your chosen charity to find out if it can accept your gift. You won’t have to pay Capital Gains tax unless your gift is to a CASC. You can deduct the market value of your gift from your business profits. For tax purposes you’ll need to keep all your records of these donations for at least six years. 

 

Secondments and volunteering – you can deduct normal business expenses if your employees are seconded or volunteer for a charity during work time. You will continue to pay your employee as part of your payroll and offset the costs against your taxable profits. However, this doesn’t apply if you’re supporting a CASC. 

 

Sponsorship – although your company gets something in return when you provide sponsorship you can still treat it as a business expense. Benefits might include public support from the charity, sales opportunities at charity events, or links from the charity’s website. 

 

There are different ways to claim tax relief depending on the type of donation. You can include donated equipment, money, land, property or shares in your Company Tax return. You can also include the costs of secondments, volunteering and sponsorship. 

 

There are rules about working out the value of land, property or shares you have given to charity. You can’t deduct more than your company’s profits for the year or declare trading losses due to your donations.