As a New Year begins, and markets ever in turmoil, many companies may be considering the best way to grow this year or how to maximise profit margins.
But has your limited company planned to give something back to the community this year?
Charitable giving can be a great way to not only support a fantastic local cause like BACAB, but to reduce the amount of corporation tax that your business is liable for. However, there are a few key details that it’s important to remember:
- Firstly, as long as you are a limited company, you can donate money to a charity and deduct it from your pre-tax gross turnover in your tax return. If, however, you are a sole trader then any donation you make will be considered a personal donation.
- There is a limited to how much you, a spouse or civil partner or linear family member (parent, child or grandchild), or linear family members of spouses, can benefit from the charity depending on how much you have donated. For more details about this, visit the gov.uk website which has a full breakdown of what’s allowed and what isn’t.
- You can only deduct payments that are donations. This can’t include money offered as a loan or with similar conditions, dividends or a share of profits from your business, or be on the condition that the charity will purchase from your business.
- Don’t forget to keep records of all your giving as you will need to supply these with your tax return.
As well as the tax benefit and the fulfilment of corporate social responsibility that regular or one-off charitable giving to a registered UK charity will bring, by supporting BACAB your business can also become a registered patron by receiving a certificate to display as well as appearing on our website.
We hope we’ve given your organisation some food for thought – if you would like to find out more about becoming a corporate sponsor of BACAB get in touch with us today.