IJC Finance

Giving Back: A Guide to Charitable Giving for UK Businesses

Isobel Chaplin •

October 29, 2024
payroll

With charity awareness days popping up on our calendars left and right, you might be wondering how your business can get involved. But before you start writing cheques, let’s break down what charitable giving means for UK businesses and how to navigate employee sponsorships.

The Basics of Business Charitable Giving in the UK

First things first: charitable giving isn’t just good for the soul – it can be good for your business too. Here’s what you need to know:

1. Tax Benefits:
Donations to registered charities can reduce your corporation tax bill. It’s a win-win!

2. No Limit:
There’s no cap on how much your business can donate to charity. Go as big (or small) as you like.

3. Timing Matters:
Donations are typically deducted from your profits before tax is calculated for the accounting period in which the donation was made.

4. Keep Records:
HMRC loves paperwork, so make sure to keep all receipts and records of your charitable giving.

Employee Sponsorships: Supporting Your Team’s Good Deeds

What about when your employees want to get involved? Here’s the lowdown:

1. Matched Giving:
Many businesses choose to match their employees’ fundraising efforts, beside it being a great way to boost morale and your charitable impact.

2. Payroll Giving:
This allows employees to donate straight from their pre-tax salary. It’s tax-efficient for them and straightforward for you.

3. Volunteering Time:
Consider offering paid time off for employees to volunteer. It’s not a direct donation, but it’s a valuable way to support causes.

4. Sponsorship vs. Donation:
If you’re supporting an employee’s charity event, be clear whether it’s a sponsorship (with business benefits) or a donation because this affects the tax treatment.

Making the Most of Your Giving

To ensure your charitable efforts pack the biggest punch:

1. Align with Yours and Your Company’s Values:
Choose charities that resonate with your business values. It’ll feel more authentic to your team and customers.

2. Engage Your Team:
Get input from employees on which charities to support. It can boost engagement and morale when employees are heard and their opinions considered for something that can be close to home for many.

3. Shout About It (Tastefully):
Don’t be shy about sharing your charitable efforts. It can inspire others and enhance your brand image.

4. Plan Ahead:
Consider setting an annual budget for charitable giving as this helps you manage your finances and your impact.

Remember, whether it’s a one-off donation for a charity awareness day or an ongoing commitment, every bit of giving counts. Not only are you making a difference in the world, but you’re also building a positive company culture and potentially enjoying some tax benefits too.

At IJC Finance, we’re here to help you navigate the financial ins and outs of charitable giving. Want to discuss how to make giving a part of your business strategy? Let’s chat!

Did you know that we support Magic Moments Children’s Charity for every tax return we submit? You can find our more about their fundraising efforts here.

Share this post..

Facebook
X
LinkedIn
WhatsApp