BIM37510 - Wholly & exclusively: case law:: subscriptions and donations: charitable gift to hospital

The less ‘selfish’, the more likely to be non-allowable

In the case of Bourne and Holingsworth Ltd v Ogden [1929] 13TC349 the High Court refused a deduction for certain subscriptions made by the company to the nearby Middlesex hospital. The Inspector had allowed previous subscriptions but the dispute concerned an abnormally large payment.

Rowlatt J brought out the element of munificence or beneficence which is often present in charitable giving and which can be a purpose in addition to any business purpose. The less ‘selfish’ the expenditure the greater the likelihood of a non-business (and so non-allowable) purpose.

You should however consider any gifts to ‘local’ bodies in the light of ESCB7 (see BIM45072).