Seconding employees to a charity

Source: HM Revenue & Customs | | 30/01/2018

There are special rules in place when a limited company gives to a charity. This can include Corporation Tax relief for certain donations made to registered charities or community amateur sports club (CASC) as well as capital allowances for giving away equipment that has been used by your company.

There are also special rules if your company temporarily transfers an employee to work for a charity. This is known as a ‘secondment’. If this happens, the company can deduct any costs as normal business expenses.

The company must continue to pay the employee and run Pay As You Earn (PAYE) on their salary. The company can set the costs (including wages and business expenses) against taxable profits as if the employee was still working for the company (and not seconded to the charity).

The same rules apply for employees that volunteer for a charity during working hours.

Planning note

The costs of employees on secondment or volunteering at a community amateur sports club (CASC) cannot be claimed in this way.

 

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