Thinking of making a Charitable Donation this Christmas?

It’s that time of year again – The Christmas tree is up, the presents are all bought and we’ve stocked up on plenty of goodies and alcohol in preparation for another festive season.  However, Christmas isn’t just about the presents and the excesses. In the true spirit of the festive season, our thoughts should turn to those less fortunate than ourselves.

If you have a limited company, there are ways you can make your donation go further – for both you and your company. When you donate as an individual, a charity receives valuable income to support the people or cause they represent. You get that warm satisfaction knowing you have done a good deed. However, when you donate through a limited company, you’re also able to claim tax relief.

You can’t create a loss with a donation or carry over any excess amount of donations to the next accounting period, but you can reduce your tax bill and help those less fortunate than yourself, which is surely a guaranteed way of ending up on Santa’s “good” list!

If you are an individual and you make a charitable donation, provided that you are a UK taxpayer, the charity can reclaim gift aid at source from HMRC, increasing the value of the donation.  You will need to keep a record of the donations made so that these can be included on your tax return form each year.

If you are looking for other ways you can reduce your tax bill, check out our 5 steps to an effective tax planning strategy article.