Yes, businesses can donate money to charity. However, if you want to make a charitable donation through your business, you’ll need to keep the documentation supporting the donation, as donations can be included as business expenses.
As such, this poses the question, is there a limit to charitable donations? How much can a business donate to charity?
Is there a limit to how much a business can donate to charity?
There is no limit for charitable donations; however, whilst there is technically no limit, to receive tax relief, your company must follow strict terms and conditions to qualify for tax relief and make ltd company charitable donations.
For example, you cannot deduct payments that are:
- Loans which the charity will repay.
- Made under a condition that the charity (or somebody connected with it) will buy property from your business.
- A distribution of company profits, for example, dividends.
Additionally, they must be below a set value if you’ve given something in exchange for your donation, such as tickets to an event. For contributions up to £100, this value is 25% of the donation, which remains at £25 for donations of £101-1,000; however, it increases to 5% of the donation (to a maximum of £2,500) for donations above £1,001.
Should your business donate to charity?
Donating to charitable causes is a fantastic way of helping others and supporting causes that are special to you or your employees. Charitable donations made by small businesses across the United Kingdom significantly contribute to the overall charitable donations; by donating to charity, your business could provide life-changing support to those less fortunate.
In addition to retaining all paperwork, it’s important to note that the charities need to be UK-registered.
