Last updated: 14 October 2026
Is a donation to a local youth club tax-deductible for your business?
It depends on your business structure and whether the club is a registered charity or community amateur sports club (CASC). A limited company can deduct donations of money to a charity or CASC from its taxable profits as qualifying charitable donations. A sole trader or partner can’t deduct a donation as a business expense, but can give through Gift Aid and claim higher rate relief personally. If the youth club isn’t a charity, a donation isn’t deductible unless it’s really sponsorship that promotes your business.
How each type of giving is treated
| Giver | Donation to a registered charity | Sponsorship with advertising |
| Limited company | Deductible as a qualifying charitable donation | Deductible as advertising if wholly for business |
| Sole trader or partner | Not a business expense; use Gift Aid personally | Deductible if wholly for business |
| Either, to a non-charity club | Not deductible | Deductible if genuine sponsorship |
Gift Aid for individuals
If you donate personally under Gift Aid, the charity claims 25p for every £1 you give. If you pay higher rate tax, you can claim the difference between the higher and basic rate through your tax return. Donations also reduce your adjusted net income, which can help with the £100,000 allowance taper.
Sponsorship
If your business pays for a youth football team’s kit with your logo on it, or sponsors an event where your brand is promoted, the cost may be deductible as advertising if it’s at a commercial rate for the publicity you get. If the sponsorship is mostly generosity, HMRC may disallow it.
Example
Kieran’s plumbing company gives £1,000 to a registered youth charity and pays £600 for the local under-12s football kit carrying the company logo. The £1,000 is a qualifying charitable donation, reducing taxable profits and saving £250 at the 25% main rate (or £190 at the 19% small profits rate). The £600 is advertising and deductible. A sole trader plumber giving the same £1,000 would claim it personally through Gift Aid instead.
Gifts in kind
- Companies and sole traders can deduct the cost of trading stock or equipment given to a charity, school or similar body
- Employees seconded to a charity: their salary remains deductible
- Gifts of land or shares by companies to charities get relief at market value
VAT
Donations to charities are outside the scope of VAT. Sponsorship where the charity provides advertising is usually a taxable supply, so the charity may charge VAT.
Common mistakes
- Sole traders deducting donations in their accounts
- Donating to a club that isn’t registered, expecting relief
- Calling a donation sponsorship without any real publicity
- Companies claiming Gift Aid on donations (they don’t need to)
Records to keep
Keep the charity’s registration number, receipts and any sponsorship agreement showing what publicity you received.
Frequently asked questions
Do companies need a Gift Aid declaration?
No.
Can I deduct raffle prizes donated?
If they’re business stock, often yes.
Are donations to political parties deductible?
No.
Is a donation to a school deductible?
Only if it’s a charity or a gift of equipment from trading stock.
Related: service discounts and charity donations, selling land to a charity and business lunch costs.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with charitable giving for businesses. 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.
