If you choose to sponsor us or one of our events or an organisation through us then it is quite acceptable to get something in return. Often this is a good way of gaining valuable positive publicity for your business. The ability to claim tax relief on sponsorship agreements depends on many things and the following is intended only as a guide. We will always try to keep this page up to date, but before making any sponsorship arrangement you should always consult your accountant, tax advisor or HMRC. This page was last updated in January 2013. For more information please see the HMRC website here.
You may choose to sponsor us as an organisation, or to sponsor one of our events, or to sponsor another community group or charity through us as part of your wider Corporate Social Responsibility policy, or as a way to get involved in something that is relevant to your business. This could be a one off agreement or a regular ongoing amount.
Sponsorship in this way is regarded as a business expense, and can be claimed against your profits for tax purposes, as you are receiving something in return for your payment. The exact return is different depending on the sponsorship agreement. We would need to pay tax on this payment as it would be classed as trading income, unless we can claim exemption.
If you make a donation then simple publicity, like a mention in our newsletter, on our twitter, facebook or linkedin feeds or via a press release wouldn’t change the nature of this. Whilst you can receive valuable positive publicity by highlighting your links to us and charities and the wider community across Staffordshire, it wouldn’t count as a return on your donation. A company, (but not a sole trader or partnership), can claim this donation as a ‘qualifying charitable donation’ and we won’t pay any tax on the donation either.
Tax Relief For Sponsorship
You can claim tax relief for sponsorship payments if we provide something in return for your donation, such as mass publicity. Examples of things we may provide in return for your donation can include, but are not limited to;
- A public endorsement of products or services
- A permanent mention on our website or literature for the period of sponsorship
- The use of our logo to promote your charitable connections and support
- The right to sell your goods or services at our events
- A link from our website to your own ‘online store’
Generally you can treat any payment to us as a business expense if you receive a reasonable return. However, there are occasions where your donation could be split between a donation and sponsorship.