UK limited companies cannot use Gift Aid, but charitable donations still attract Corporation Tax relief by reducing taxable profit. Use this calculator to see the true net cost of your company’s donation after CT savings, and how this compares to simply paying the money to shareholders as a dividend.
Corporate Donation CT Relief Calculator
Frequently Asked Questions
Can a limited company use Gift Aid?
No. Gift Aid is only available to individuals (and certain trusts). UK limited companies cannot use Gift Aid. Instead, a company donation to a registered charity qualifies as a deductible business expense, reducing the company\'s taxable profit and therefore its Corporation Tax bill.
How much corporation tax does a company save on a charitable donation?
The saving depends on the Corporation Tax rate. At the main rate of 25% (profits over £250,000) a company saves 25p for every £1 donated — so a £10,000 donation has a net cost of £7,500. At the small profits rate of 19% the saving is 19p per £1.
Does a charity receive more from a company donation than a Gift Aid donation?
With Gift Aid an individual\'s donation is grossed up by 25% (basic rate reclaim). With a company donation the charity receives exactly the amount donated — no top-up — but the company gets the Corporation Tax deduction instead. For higher-rate taxpayers, personal Gift Aid with higher-rate relief can be more efficient; for basic-rate taxpayers the CT route is broadly similar.
Can a company donate to any charity?
The charity must be a registered UK charity or Community Amateur Sports Club (CASC). Donations to overseas organisations that are not HMRC-recognised charities may not qualify for CT relief. Payments to charities where there is a direct personal benefit to the donor or a connected person are also not fully deductible.
Is there a limit on corporate charitable donations?
There is no statutory cap, but donations must be wholly and exclusively for the purposes of the company\'s trade, or made as a qualifying charitable payment. Very large donations that create a trading loss may not all be relievable in the same year, though they can be carried back or forward in some circumstances.