Corporate claims for charitable donations

Posted on 6th August 2024 by Streets - Corporation Tax

When a limited company makes charitable donations specific rules apply. These may include Corporation Tax relief for donations to registered charities or community amateur sports clubs (CASC), as well as capital allowances for equipment donated that has been used by the company.

However, the rules are different if the company is given something in return for making a donation, such as tickets for an event.

Donation amount	Maximum value of benefit
Up to £100	25% of the donation
£101 - £1,000	£25
£1,001 and over	5% of the donation (up to a maximum of £2,500)

These rules apply to benefits given to any person or company connected with your company, including close relatives.

Charity sponsorship payments are different from donations because the company gets something related to the business in return. A company can deduct sponsorship payments from its business profits before it pays tax by treating them as business expenses.

Payments qualify as business expenses if the charity:

publicly supports the company's goods or services;
allows the company to use their logo in company’s printed material;
permits the company to sell their goods or services at the charity's events or premises; and/or
has links from their website to the company's website.

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