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Post Info TOPIC: charity donation from a sole trader
Kate1


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charity donation from a sole trader
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Hi,

I prepare the accounts for a sole trader who has made a charity donation of £80.  I'm unclear on how to treat this - is this an allowable expense or am I to put it to drawings?

Many thanks



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Mad Liz


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If you're a sole trader, or your company is a partnership, payments you make to charity may qualify as donations under the Gift Aid scheme. They're personal donations so you won't be able to set them against your profits for tax purposes. But your chosen charity will be able to claim back the equivalent amount of the tax on the donation at the basic rate.

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Liz Needham FFA FIAB FFTA

Needham Accountancy Ltd
Kate1


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Thanks Liz,

So, for the purposes of preparing accounts, can I clarify it is correct to post to drawings as it's regarded as a personal transaction?

 



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Don Tax


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If there is a public relations element; ie. if your potential or existing customers will hear about it, or if it may result in a mention in the local news then it can be argued that the donation is advertising.
Tim

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