Last updated: 14 October 2026
Can your company get tax relief for donations to a local school or charity?
Yes. A company can deduct donations to a registered charity, including many schools that have charitable status, from its taxable profits. Unlike individuals, companies don’t use Gift Aid. The donation is deducted in full from profits when it’s paid. Donations to a school that isn’t a charity, such as some state schools, aren’t covered by charity relief, but may be deductible as a business expense if they’re really sponsorship or advertising.
How companies get relief
| Type of payment | Tax treatment |
| Cash donation to a registered charity | Deducted from total profits |
| Gift of equipment or stock to a charity or school | Deductible if from the trade |
| Sponsorship with advertising in return | Deductible as a trading expense if wholly for business |
| Payment to a non-charity school with no business benefit | Not deductible |
| Donating shares or land to a charity | Deductible at market value |
Is the school a charity?
- Academies are exempt charities, even if they don’t appear on the Charity Commission register
- Independent schools are usually registered charities
- Parent-teacher associations are often registered charities
- Maintained schools may have a charitable trust for fundraising
Ask the school for its charity number or confirmation of exempt charity status.
Example
Fenwick Builders Ltd donates £2,000 to its local primary academy for new playground equipment. The academy is an exempt charity. The company deducts £2,000 from its taxable profits, saving £500 at the 25% main rate, or £380 at the 19% small profits rate. If the company gets advertising on the school’s website in return, it could treat the payment as a trading expense instead.
Benefits to the company
If the charity gives the company something in return, the donation may not qualify. Small benefits are acceptable, up to 25% of the first £100 donated and 5% of the amount above that, with a maximum of £2,500.
Donating equipment
If the company gives away equipment it uses in its trade, such as computers, there’s no disposal value for capital allowances. Stock given to charity is deductible as a trade expense.
Claiming the relief
Enter the donation in the qualifying charitable donations box on the company tax return (CT600). Relief can only reduce taxable profits to nil; it can’t create a loss.
VAT
If you give goods to a charity for sale or to be given away, the gift may be zero-rated. Business sponsorship is standard-rated if the charity is VAT registered and gives advertising in return.
Common mistakes
- Claiming a donation to a school that is not a charity as a charitable donation
- Treating a payment to a director’s child’s school as a company expense when it benefits the director, which may make it taxable on them
- Accepting tickets or hospitality worth more than the donor benefit limits
- Claiming the donation in the wrong accounting period; relief is given when it is paid
Frequently asked questions
Is there a limit on company donations?
No, but relief only reduces profits to nil.
Can my company claim Gift Aid?
No, it gets a deduction instead.
Can I donate personally instead?
Yes, with Gift Aid; this suits higher-rate taxpayers.
What records should I keep?
A receipt from the charity confirming the donation.
Related: Gift Aid tax relief, charitable donations and the Personal Allowance and whether the company can claim tax relief.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with company tax planning. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
