Help With Business Giving To Charity Please.

[Retrochic]

I've just spent half an hour going around in circles at HMRC so hopefully someone may be able to help on this question on here. I have a registered business and sell vintage and retro items on line and at Fairs. Often I have to buy 4 or 5 boxes of stuff at auction to get the items I want, so give what I don't want or can't sell to charity,I've calculated its around 25 - 35% of the boxes contents. Sometimes they have a charity box at the auction houses but more often than not I drop stuff off at the Salvation Army or Hospice. My question is can I get Tax Relief on this, write it off against profits,? and if so how do I go about doing it? is there a Form to fill in? No info on the HMRC and when I called the charity line it was for the Charities themselves not people giving to them. Thankyou

[buildersmate]

Well there is information in the HMRC website and I guess it's knowing where to look. See here:

http://www.hmrc.gov.uk/businesses/giving/gifts-in-kind.htm

It seems to come under the category of gifts of stock to a charity but it doesn't say too much about the practical side of accounting for it.

Like much in self-employed / limited company taxation, there are some clear guidelines, and other areas where things are less clear. Provided you make reasonable valuation judgements about what you are giving away and don't try to abuse the system, it seems OK to do this. I suppose you really want a simple receipt from the charity for potential audit purposes by HMRC.

[Retrochic]

Thanks builders mate -I already read that article and contacted the help line to no avail -I have however found out that when I do my Business Tax Return there is a place for 'charitable donations' -apparently I don't need to provide proof which seems a little strange, just the total amount of stock given.

[Skyline D]

Can't help but feel you are trying to be unnecessarily complicated here. You buy stuff for business purposes. You sell some of it and give the rest away, rather than binning it. Your purchases are a business expense. Your sales are trading income. You are therefore already getting full tax relief on it.

The guidance you refer to is intended for situations where you either make something then give it away or buy separate items and then end up giving them away. The situation you describe isn't that unless you could conceivably look through these boxes of purchases first and buy only the things you need for a lesser value. If it would cost you what you spent anyway then the value of the other items is Nil.

[dancecaller]

The charitable donations can benefit you if you pay higher than basic rate tax (e.g. higher rate, or have an age allowance reduced due to income).
Some charities, when they accept goods will also write down your details (if you ask them to) so that they can claim Gift Aid when they sell the goods.

[dancecaller]

On second thoughts, my answer only applies to people who have already paid tax on the income. So I think I agree with Skyline.