Client makes monthly donations of £100 and £50 respectively to two schools attended by his children. My feeling is that the donation cannot be deducted from trading profits due to the benefit derived rule. Does anyone agree/disagree?
Also, when a trader makes a deductible donation via their business account e.g to cancer research, do they claim relief via deduction from trading profits, or via the "do you make gift aid donations" box on personal tax return?
Many thanks
Replies (5)
Please login or register to join the discussion.
If self-employed...
... then it's a personal donation, possibly under Gift Aid if they have made the necessary declaration.
Only companies deduct from profits (or rather income)
Personal benefit
only affects whether it can be subject to GA. You asked if it could be a deduction from trading income; which is a clear no as it isn't W,E &N.
As long as the payment does not secure any benefit to the payer, it should be GAable; if he &his children are treated the same as anyone who doesn't donate, there shouldn't be a problem. See here for tech analysis http://www.taxjournal.com/tj/articles/tainted-charity-donations-29982
How much is ths "helpline"?
The Helpsheet 222 makes this clear as it confirms the following are disallowable:-
Payments to clubs, charities,
political parties and so on;
non-business part of any
expenses; cost of ordinary
clothing.