BIM45072 - Specific deductions: entertainment: gifts: exceptions: gifts to charities

Statutory relief and ESC/B7

You should not treat gifts made to charities as business entertainment expenditure. If such gifts are made for the purposes of the trade they are not disallowed by ICTA88/S577 - see BIM45150 onwards for further guidance on other types of charitable gift, including Gift Aid.

This exception is contained in ICTA88/S577 (9). For the purposes of this section, a charity includes the Historical Buildings and Monuments Commission and the National Heritage Memorial Fund.

A trader may also donate to other voluntary bodies that are not registered charities. Where the gift is made for the purposes of the trade, ESC/B7 allows a deduction to a body established for educational, cultural, religious, recreational or benevolent purposes on the following conditions:

• The voluntary body is local in relation to the business activities,
• Its activities are not restricted to persons connected with the donor,
• The expenditure incurred is small in relation to the scale of the donor’s business.

In the same way, you should allow the ordinary annual subscription to a local trade association paid in the normal course of trade by a non-member .