TAX TIP OF THE WEEK - Sponsoring a local sports team can be a great way to give back to the community. In addition, there are also tax reliefs to be obtained, however, to avoid issues with the Taxman it is important to follow the correct steps..

So you have just helped your son’s football team with a sponsorship payment from your company. In the past HMRC have declined tax relief on these payments as they argued the reason was more of a personal donation than something that would benefit their business.

To avoid this situation it is advisable to ask the sports club can set out in writing how your business can benefit from the payment, this could be:
Names on shirts
Advertising hoardings
Access to special business events and local business owners
Any other benefits that are likely to be provided

This can also be demonstrated by documenting any research that you have done which will detail future benefits to the company. Although this may take years for this to effect sales, the fact that you have carried out the research will make it difficult for the taxman to argue against it.

Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist