Gifts to charity made by companies

Gifts of money to UK charities by companies are made before tax is deducted (i.e. out of gross income or profits) so no Gift Aid declaration is required.

Companies can claim tax relief for donations to UK charities as a charge against income in their corporation tax computation.

Restrictions

• Tax relief can only be claimed for the accounting period during which a gift is made
• Relief is restricted to the amount of corporation tax profit available for that accounting period.
• A donation to a UK charity cannot be used to create a loss for corporation tax purposes.

Time limits for claiming relief

For most companies gifts of money to UK charities must be made during the accounting period to which they relate.

However, for a company that is a wholly owned subsidiary of one or more charities an additional nine months after the end of the accounting period to which that gift relates is allowed for the gift to be made. A claim to carry back a gift in this way must be made within two years of the end of the accounting period to which the gift relates.