Income Tax Relief
We are happy to provide a receipt that you can submit as part of your tax reclaim process.
In most cases this means that companies or individuals (who pay higher rates / corporation taxes) can claim back donations to charity with a receipt from the Charity.
Income tax relief (individuals)
You can pay less income tax by deducting the value of your donation from your overall taxable income. You can do this by adding the amount you’re claiming in the ‘Charitable giving’ section of the Self-Assessment tax return form.
In addition, if you are a higher rate tax payer and donate £100 to charity, the charity can claim Gift Aid to make your donation £125. As you pay 40% tax, you can also personally claim back £25 (20% of £125).
Tax reliefs for limited companies donating to charity
There are different tax reliefs available for limited companies who donate to charity. A limited company will pay less corporation tax when it donates the following to charity:
• equipment or items that the company sells
• land, property or shares
• employees (for example those on secondment)
• sponsorship payments
They can claim corporation tax relief by deducting the value of the donation from the total business profits before tax is paid.
Sponsoring a charity
As a limited company, they can also sponsor a charity. Sponsorship is beneficial for both the charity and the company, as the company gets something related to the business in return. The company can receive extra publicity and the charity receives much-needed funding. They can deduct sponsorship payments from their business profits before corporation tax is paid by treating them as a business expense.