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Tax benefits of fundraising initiative

  • 08-02-2022 11:09am
    #1
    SelfBuild2019
    Registered Users, Registered Users 2 Posts: 35 ✭


    Hi there

    If a large private company is running a fundraising initiative for charity, what would be a good selling point to other companies when seeking donations? I know donations can be written off against trading profits - does this just give a 12.5% tax saving to limited companies? Are there any other benefits?

    I also read that there is a Charitable Donation Scheme, whereby if an individual donates €250, the company can claim a further 45% back from the Revenue.

    Is there anything else that i have missed?



Comments

  • #2
    ThreeGreens
    Registered Users, Registered Users 2 Posts: 320 ✭✭ThreeGreens


    You've mixed up a few things.


    Firstly for the company to claim the tax relief:

    1. The donation must be €250 or more to the charity in a year. So a donation of €200 doesn't qualify and two donations of €125 to different charities don't qualify. The donations must total €250 or more in the year to the individual charity.
    2. The charity must be an "Approved body". There are a few different approved bodies, but mostly you are looking at a charity that has applied to the Revenue Commissioners to be on the scheme. All the big ones would have applied, but you might find some smaller or once off fundraising haven't and therefore donations to them don't count.

    The relief is effectively a 12.5% deduction in their Corp Tax bill. So if they made a donation of €1K to the approved body, their Corp Tax bill will be reduced by €125.


    The second part of what you say is wrong. That relates to the charity claiming back money from the government where an individual makes the donation.

    Basically where the individual makes a qualifying donation to an approved body, the individual gets no tax relief but the charity claims the tax relief from the Revenue. Where a company makes a donation, the company gets a tax deduction but the charity can't claim anything from the government.


    The only other benefit might be the goodwill or publicity that the company would get if it was a sizable donation or they ran a fundraising event. Maybe even the publicity might be in their own company newsletter or marketing material.



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