Company Donations

Help us fulfil our vision…. Donate money, stock and equipment or alternatively transfer an employee

GUIDANCE FOR COMPANIES DONATING GOODS AND SERVICES

Can your company help us fulfil our vision to place scouting at the heart of Henfield for the next 100 years by donating goods, services or money to the HSCC Building Appeal? The Appeal is administered by the Clarkes Mead Trust, registered charity no. 305885, so by donating you can reduce your company’s tax bill.

Ways that your company can help:

• Demolish the existing building
• Site preparation
• Materials for the construction of the shell building such as structural steel, cladding and roofing.
• Materials for the fit out of the building such as kitchen furniture
• Carpentry, wiring and plumbing
• Internal climbing wall
• External landscaping

Guidance on donations and taxation

1. Limited companies can pay less Corporation Tax when they give money* or donate stock and equipment** to a charity. The value of the donations can be deducted from the total business profits.

• Corporation Tax returns are prepared under the self-assessment system and a company can claim in its Corporation Tax Self Assessment return to set the amount of the donation against its taxable profits to the extent that it reduces the chargeable profit to nil.
• Donations cannot create or add to a trading loss but where a loss has been incurred it is possible, for larger groups of companies, that charitable donations can be group relieved provided that the payer of the donation is a member of a corporation tax group.
• Donations are relievable against company profits on a cash rather than accruals basis in the accounting period in which the donation is made. Excess charitable donations cannot be carried forward against future profits of the trade.
• A limited company can also deduct any costs as normal business expenses if it temporarily transfers an employee to work for a charity or an employee volunteers for a charity during work time. In these circumstances the company must continue to pay the employee and run PAYE on the salary but the wages and business expenses are allowable against taxable profits

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2. Sole traders and Partnerships can obtain tax relief for charitable donations but such donations can only be money and not in respect of stock and equipment or by seconding employees.

Notes

* Money – where a donation is made in a monetary form the payment must be in cash and cannot be in the form of a loan or made as a dividend.

** Stock and equipment – the donor can donate equipment or their trading stock. However, this must be items that are used directly in the company’s trade and cannot be items purchased from a third party specifically for donating. The donor company will receive a corporation tax deduction for the cost of stock in the period in which the gift is made but only to the extent that the company has taxable profits that may be relieved.

Where equipment is donated, which has been used by the company in their trade, they may claim capital allowances on the cost of the equipment to achieve a corporate tax deduction. This applies to fixtures & fittings, computers and other plant and machinery qualifying for capital allowances purposes.

Please help us fulfil our vision by donating money, stock and equipment or alternatively transfer an employee (especially if the employee is employed in the construction sector).

Contact Dave Malkin 07929 840321 or Graham Norris 07703 186961 to discuss further.