Can I deduct charitable donations from the IR35 deemed payment?
The Chancellor introduced, from April 2000, new measures aimed at modernising and simplifying the tax system to boost giving to charity. There is now no maximum limit for payroll giving to charity by an employee. Any donations paid through the payroll are tax free and, in addition, a 10 per cent supplement on such donations will be given for three years from April 2000. Companies can also offset any payments made to charities as an expense against company profits.
Both these tax provisions apply to Personal Service Companies, however the company may not have any 'profits' where all the payments it receives for the worker are subject to PAYE and Class 1 contributions, against which donations to charities can be offset. The worker can, however, arrange to make donations to a chosen charity through the payroll.
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