Feeling Generous this Christmas? Tax efficient giving…

Christmas is the time for giving so why not be tax efficient at the same time?

Corporation tax relief and even personal tax relief can be achieved by making charitable donations during the festive season, or any other time of year. Not to mention make you feel ruddy good about yourself by spreading some good will throughout your community to those less fortunate than yourself.

If you are in a generous mood this Christmas season, much like our jolly red suited friend, why not put a charitable donation through your Limited Company to a worthy cause of your choice….

Today we look at the tax efficiencies of making donations to registered Charities and CASC’s (Community Amateur Sports Clubs) and what to look out for when donating. So why not get yourself on Just Giving or Virgin Money after a few festive beverages this week and make yourself feel (even more) warm and fuzzy inside.

The Good News for People on the Nice List (of Limited Company Directors)

Donations to a charity can be offset against Corporation Tax if the donation is made to a registered charity, you would simply pay the donation from your company account and include it on your next expense submission.


A couple of points to look out for:

[dropcap type=”square”]1[/dropcap]     No family member must benefit from the charity donated to.

[dropcap type=”square”]2[/dropcap]      There needs to be some sort of proof from the charity of the donation made, which must also include the registered charity number. In order to claim tax efficiency the organisation you are donating to must be recognised as a charity for tax purposes by HMRC (the tax man).

[dropcap type=”square”]3[/dropcap]     If you are not 100% sure if the charity you are donating to is registered for Tax purposes, you can ask them for their charity registration number – this will usually be noted on their giving page, or at the bottom of their website.

[dropcap type=”square”]4[/dropcap]      Your charity can also claim back tax, if you claim your donation is under the ‘Gift Aid’ scheme when donating.

[dropcap type=”square”]5[/dropcap]      You can claim tax relief on your donation to the charity of your choice by noting it on your Personal Tax Return (self assessment) for the year concerned.

[dropcap type=”square”]6[/dropcap]      There is also relief for Higher Rate Tax Payers in the UK, when you claim Gift Aim, and in some cases you can claim tax back from HMRC on your donation.

[dropcap type=”square”]7[/dropcap]      If looking to the future, you could leave a gift or donation to a charity in your Will. You can receive a will through our Will’s partners WW J McClure, (£150 for one, and £250 for a mirror will for yourself and a partner). The value of this charitable gift in your will, will not be included when valuing your estate, which may lower your Inheritance Tax.

[dropcap type=”square”]8[/dropcap]     You will need to keep back up that this charitable donation was made. Most giving pages provide you with an email confirmation once the funds have been received, so this should be easily done. Remember to keep a copy of this.


On behalf of all of the team here at FW Accounting, we would like to wish you a fantastic festive season! And we shall look forward to hearing from you in the year 2013!


FW Accounting. You Count. We Count. 

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