Gift to clients summer fete, is it something I can claim back on my tax return?

[Fluffycloudland77]

I thought I'd donate some champagne.

Only if you get a receipt and only if you are a 40% taxpayer....

Are you self employed? If so, gifts to a charity or a "body of persons or trust established for charitable purposes" (which may include the organising committee of a fete) can be included as allowable expenses.

Only cash donations cen be treated as gift aid so if not self employed there is no tax relief.

Yes, I am self employed but not higher rate tax payer.

So if I donate cash I can claim it back?

This link sets out the rules on charitable giving...

"If you pay higher rate tax, you can claim the difference between the higher rate of tax 40 and/or 50 per cent and the basic rate of tax 20 per cent on the total 'gross' value of your donation to the charity or CASC."

If you are not a higher rate tax-payer the charity can claim gift-aid but you can't claim any tax back on donations.

No. Donate the champagne and claim it back through your business accounts as a gift. Cash donations cannot count as business gifts, can only be made to charities who reclaim the basic rate tax you have paid.

I see, Thank you both. Just got to hope the others in the chain dont all want donations too.

I wouldnt mind if there accounts office paid on time, their cut off dates for invoices seem arbitrary to me.

Mr anchovy - you can't claim gifts of alcohol against your business tax, either for income tax or VAT (or corporation arc either for that matter).

However cash gifts to charity for 'business purposes' can be claimed against business accounts. A valid business purpose would be advertising, so if there is a list of donors for example saying thanks to fluffy cloud for kind donation of £x, that could count as PR. if however you'd nt actually generate any goodwill for the donation, I.e. no-one would know you'd donated it then there wouldn't usually be sufficient business purpose. Hope that makes some sense?

Trioofprinces I am not aware of any restriction that would prevent the relief given by S47(5) of the Income Tax (Trading and Other Income) Act 2005 applying to a gift of alcohol? This act does not apply to VAT, where I agree it is unlikely that input tax could be deducted (unless the gift is made from trading stock, in the case of a wine merchant for instance).

Note that for Corporation Tax S1300(5) of the Corporation Tax Act 2009 applies, and this relief was previously available under ESC B7. These provisions only apply to gifts (i.e. not cash donations), but do not require any business purpose test.