If your limited company donates money to a registered charity, it can claim tax relief. This means the donation is deducted from your profits before Corporation Tax is calculated, reducing your tax liability.

In addition to cash donations, tax relief is also available for:

• Sponsorship Payments: Contributions made in return for advertising or promotion of your business.
• Gifting Equipment: Items such as laptops, computers, or play equipment donated to charities can also qualify for tax relief.

These types of giving not only support worthy causes but also create opportunities for your business to make a positive impact.

Gift Aid for Individuals

If you’re making personal charitable donations under Gift Aid, there are additional benefits:

• Tax Relief for Higher and Additional Rate Taxpayers:
  • Higher rate taxpayers can claim back the difference between the basic rate and their tax rate on donations. For example, a £100 donation could result in a £25 Gift Aid contribution from HMRC, and the taxpayer can claim back an additional £25 on their tax return.
  • Additional rate taxpayers can claim back even more.

To access this relief, you’ll need to include your donations on your personal tax return or contact HMRC if you don’t usually file one.

Keep Records for Maximum Benefit

To ensure you receive all available tax relief, it’s essential to maintain clear records of your charitable contributions. This includes receipts, Gift Aid declarations, and details of any equipment donated.

Get the Business You Want

Charitable donations are a wonderful way to give back, support your community, and boost your tax efficiency. Whether you’re a business owner or an individual donor, understanding the rules can help you make the most of your generosity.

If you’d like help navigating the tax implications of charitable giving, we’re here to assist. At Carthy Accountants, we’re Helping You Get the Business You Want.

Get in touch today to make sure your giving works for you, at Christmas and beyond.