Ways companies can help
Our Corporate Friends scheme is designed to be a vehicle for the increasing number of companies and larger organisations that recognise ME/CFS as an illness, the incidence and cost-of-care of which have important implications for their customers and employees. It is important to remember that businesses can also give tax effectively through:
Gift Aid
Companies make donations under Gift Aid simply by making a payment to a charity. The company can then deduct that amount in computing its profits for corporation tax purposes for the accounting period in which the donation was made. The company does not have to give a declaration. Wholly-owned subsidiaries of charities can make donations to the parent charity and carry back the deduction, up to 9 months, into an earlier accounting period. Before 1 April 2000, when a company made a qualifying donation to a charity there was a requirement for the company to deduct basic rate income tax from the donation.
Proprietors of unincorporated businesses or partners in a partnership make Gift Aid payments as individuals as described on our page How to help ME Research UK. See also the Inland Revenue website.
Giving certain shares or securities
From April 2000, a new tax relief was introduced to encourage individuals and companies to give certain shares and securities to charity. From 1 April 2000, companies can claim a deduction for the gift for corporation tax purposes. This is in addition to the exemption from corporation tax on chargeable gains which was already available for gifts of investments to charity. You can claim this relief if you give, or sell at less than market value, any qualifying investments to a charity. The following investments qualify for the tax relief:
- Shares and securities listed or dealt in on the UK Stock Exchange, including the Alternative Investment Market
- Shares or securities listed or dealt in on any overseas recognised stock exchange
- Units in an authorised unit trust (AUT)
- Shares in a UK open-ended investment company (OEIC)
- Holdings in certain foreign collective investment schemes (foreign equivalents of AUTs and OEICs)
If in doubt, the Inland Revenue (Charities) can tell you whether your shares or securities will qualify.
The amount you can deduct from your income for the tax year in which the gift takes place is:
- the market value of the shares or securities at the date of the gift, plus
- any incidental costs of transferring the shares (such as broker’s fees or stamp duty), less
- any disposal proceeds or other money or the value of any other benefits you, or a person connected with you (such as a relative), receive in consequence of your giving or selling the shares to the charity.
You can claim relief, at your highest rate of tax, on your Self Assessment return. If you do not usually receive a tax return, you should write to your Tax Office and let them know about your gift. If you decide to give some shares to charity, the Inland Revenue leaflet IR178 ‘Giving shares and securities to charity’ will tell you more about what you need to do and how to calculate and claim the tax relief.
Giving business assets
Relief is available to businesses that gift an article to charity that is either an item manufactured or sold in the course of the trade, or machinery or plant used in the course of the trade. The relief is available to companies, sole traders and trading partnerships.
