tax breaks for companies who sponsor you

[kombikids]

does anyone know anything about the above? we run our own business and am wondering if there are any breaks or whether its hard to do. I know we have to justify the money as a legitimate business expense which is fine as a lot of our clients use the big horse events.

thanks for any help!

 

[Silverspring]

No tax breaks that I know ofbut I specailised in corporate tax when I was doing my exams so I'm not 100% sure if it's the same for personal tax. Your accountant would know

 

[pennyh]

the expenditure is deductible from profit for tax purposes as long as the business is deriving a commercial benefit

however , sponsoring someone involved with the business , ie the proprietor or their relatives can be alot more tricky & the revenue may disallow the expenditure on the basis that is is not wholly & necessarily incurred for the benefit of the business , ie they won't let your business fund your hobby!

 

[Beanyowner]

[ QUOTE ]
is not wholly & necessarily incurred for the benefit of the business

[/ QUOTE ]

You forgot exclusively as well...I've had that phase so DRUMMED into my head!

Total agreement on what you said tho...very much doubt you'd be able to wrangle it if you want to sponsor yourself!

 

[lcormack]

The "exclusively" only applies to employee expenses. If you look to sponsor a third party, unrelated and ensure that you are seen to derive some benefit, such as your business name on the lorry, saddlecloth etc, refer to your sponsorship on your website or your own newsletters and the expenditure is reasonable then, as a chartered accountant, I would say that generally it could be deductible against your profits.
If you are talking about your own competing, a bit harder to justify but I have seen it done, take good professional advice on this though.

 

[kombikids]

thankyou - i have seen it done a lot but not sure of the ins and outs - my accounts arent great! anyway - its my OH business and my competing (ie was thinking of name on rug / trailer etc) but some of our biggest clients (eg berkeley homes) sponsor the largest shows (ie olympia last year) so it would be gaining attention. But also doesnt eventing have the largest demographic AB audience of any sport which is a great target audience.What expenditure can you use?

Just want some idea of what i am talking about before i approach our accountant ...

 

[OWLIE185]

Please be aware that any sponsorship which you receive may be consideed by the Inland Revenue to be un-taxed income and therefore you may have to declare it on your annual tax return.

 

[Thistle]

To justify sponsorship you would have to be competing at a decent national level yourself, with a proven record BE (if eventing).
I don't think the taxman would allow just RC stuff.

We looked into sponsoring B who is eventing at Novice but decided to invest in sponsoring a series of events instead.

 

[kombikids]

ok noted! just thought it may be worth looking into.

 

[pennyh]

agree with thistle , as an accountant if the expenditure was not excessive my advice would be i'd let you put the expense through but warn you that you risk a query on the tax return & having the expense added back , tax & interest levied & possibly a penalty depending on the inspector

i'd also tell you to keep record of the benefit the company has subsequently derived from the 'sponsorship' , on the basis that if none could be demonstrated the revenue would certainly seek to disallow the expense on the basis that to continue the sponsorship is not a commercial decision