I have a client (non charity) who wishes to hold a mini music festival for charity. This mini music festival is not linked at all to his normal type of trade. He is proposing to sell tickets to cover the costs such as the bands and the alcohol. Any profits will go to charity.
The client obviously wants to account for the event so that the outcome is most cost effective for both himself and the charity.
As far as I see it, he can either do this personally or through his partnership business or through his Limited Company. I'm aware of the differences on the charity as to how they receive the money ie if given personally or through the partnership, the charity can claim gift aid but if through the Limited Company the charity will receive the amount gross. I'm a little unsure as to which way would benefit the client best, since if he does it through the partnership he will end up with a taxable profit on the event since the charitable donation payment will be disallowed. Also the client is a basic rate taxpayer so the charitable donation will not really benefit him personally.
However I'm also a little concerned that the client wants to restrict this event to family and friends, so are there then issues to adddress such as being classed as 'entertainment' by HMRC?
Any advice from anyone who has dealt with fundraising events would be greatly appreciated.