Charity donations via the company
Written by Ray Coman
A donation made via a company to a UK registered charity can be deducted from profit for tax purposes. There has to be a gratuitous intent for the payment to be regarded as a donation. If the company receives a benefit in return the payment is not regarded in the manner of a donation.
Limited company owners are often pay no income tax. This is because the salary received is less than the personal allowance and the dividend does not give rise to income tax. In such cases, the charity could not obtain the basic rate tax relief from HMRC. A donation made via a company would obtain tax relief provided the donations are not more than taxable profits.