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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Charity event tax relief

Customer Question

I run a small ltd IT company. I want to take part in a networking/charity event later this year that will involve cycling days. The company and I will also be fundraising nominated charity. I'd like to know how or indeed if I can claim corporation tax relief on the expenses I will incur. These are likely to be approx. £750, and also in the training costs that I will incur, which will be approx. £450. Thanks Nick

Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Nick, I'm Keith and happy to help you with your question. Good news; these donations would appear to be an allowable charge against profits Tax purposes.
The Gov UK web site gives the following guidance:
'Deduct from your profits
Claim relief in the Company Tax Return that covers the accounting period during which you made the donation or sale if you have:
donated money given trading stock given or sold land, property or shares
Enter the total value of your donations in the ‘Interest payable and similar charges’ box of the ‘Profit and loss’ section of your tax return.'
The sums you quote are relatively small and well within the limits laid down elsewhere.
Customer: replied 2 years ago.
Keith
Thank you quick response. It is not the donation I am looking on, but the costs incurred whilst training and carrying out the event. These would be things like paying rides, campervan hire during the 9 days. These are the costs, not money given to the charity.
Kind regards
Nick
Expert:  bigduckontax replied 2 years ago.
I would suggest that the 750 quid could be charged against Corporation Tax as it could effectively be construed to be a donation, albeit disguised.
The training costs are more of a moot point.
Here is the opinion of the Contractor UK web site [edited]:
'Where attendance at a course is intended to give business proprietors new expertise, knowledge or skills, which they lack, it brings into existence an intangible asset that is of enduring benefit to the business. We take the view that the expenditure is therefore of a capital nature, and deduction is prohibited by ICTA88/S74 (f).
"On the other hand, where attendance is merely to update expertise etc. which proprietors already possess, the expenditure is normally regarded as revenue expenditure and will be deductible if it satisfies the 'wholly and exclusively purposes of the trade' test.'
This is exactly the position according to my understanding and I concur with Contractor K' opinion. New skills, not allowed against revenue; updating existing skills, allowed.
I do hope I have shed some light on your position, Nick.
Please be so kind as to rate me before you leave the Just Answer site.
Regards
Keith

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