BIM37510 - Wholly and exclusively: case law: subscriptions and donations: charitable gift to hospital
S34 Income Tax (Trading and Other Income) Act 2005, S54 Corporation Tax Act 2009
»Ê¹ÚÌåÓýapp more the expenditure could be for general philanthropic purposes the more likely it is to be non-allowable
In the case of Bourne and Hollingsworth Ltd v Ogden [1929] 14 TC 349, the High Court refused a deduction for certain subscriptions made by the company to the nearby Middlesex hospital. »Ê¹ÚÌåÓýapp Inspector had allowed previous subscriptions but the dispute concerned an abnormally large payment.
Rowlatt J brought out the element of munificence or beneficence which is often present in charitable giving and which can be a purpose in addition to any business purpose. »Ê¹ÚÌåÓýapp more the expenditure could be for general philanthropic purposes, the greater the likelihood of a non-business (and so non-allowable) purpose.
As far as unincorporated businesses are concerned, donations to charity can be made personally by the trader or partner via Gift Aid and a company making donations to a charity may obtain relief from Corporation Tax in respect of those donations. See also the guidance in BIM45072.