It’s Red Nose Day! Are you doing funny for money today?
The money raised for Red Nose Day is spent by Comic Relief to transform the lives of millions of people, both at home in the UK and across Africa, funding fantastic projects that really do change people’s lives. So, donating or sponsoring someone will make you feel that you’ve made a bit of a difference, but on top of that, there are benefits for your small business when you give to charity.
Giving a donation or sponsoring a team
If you make a donation and don’t receive anything in return (apart from a good feeling!), then this is classed as a straightforward donation. It can also help build a positive image for your business too. If your company donates (it has to be a donation from the company rather than from a sole trader or partnership), you can deduct the value of your donation from your company’s total profits when you calculate your Corporation Tax. For how to claim, visit the HMRC website.
Giving shares, property or land
You can’t give shares in your own company to a charity, but you can give ‘recognised shares’ in other companies, land and property as a gift. You can claim corporation tax relief for such gifts, and you can claim relief if the gift is sold to the charity for less than the market value. For more information on how to give, and how to claim tax relief visit HMRC.
Giving equipment or stock
Giving equipment or stock are both considered as ‘gifts in kind’ and you can get tax relief. Company equipment, such as office furniture, computers, printers, cars/vans, tools and machinery all count, but they have to have been used in ‘your normal business activities’ to qualify.
If you donate goods that your business makes or sells – your ‘trading stock’ – to a charity, then you can claim the cost of these goods in your business accounts, reducing your business’s taxable profits by the full cost of the goods. For more information, go to HMRC
You could consider becoming a partner – for more information visit http://www.rednoseday.com/partners
Setting up a Payroll giving scheme is a great way to help a charity. Payroll giving enables your employees to give to their chosen charity directly from their gross salary, before the tax is deducted, making the donation worth more to the charity. It also allows charities to budget ahead, providing them with regular, reliable income.
The costs of setting up a scheme and the small ongoing costs of running a scheme are deductible for tax purposes and help support corporate social responsibility (CSR) schemes too. For more information, visit the Payroll Giving Centre and HMRC, for how to set everything up.
Giving is good!
So giving is good – not just for the charity, but for your business too…. So do something funny for money and support Red Nose Day 🙂
(For more information on what you can and can’t claim, and how to claim any tax benefits, then visit the HMRC and The Institute of Fundraising.)
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