Date01 Sep 2021
HMRC is perhaps not the first place a charity would look if it needed cash, but these valuable tax reliefs that provide real cash payments to charities should not be overlooked.
A charity can claim an additional cash repayment from HMRC where it receives donations from UK tax paying individuals. Charities can claim an extra 25p for every £1 an individual donates.
To claim Gift Aid the entity will need to be recognised as a Charity with HMRC. The individual making the donation needs to make a declaration which gives the Charity permission to claim Gift Aid and confirms that they have paid at least as much UK tax in that tax year.
Gift Aid can increase the value of donations by 25% so charities should encourage their eligible donors to sign up.
Theatre Tax Relief
Theatre Tax Relief (TTR) provides a tax break for production companies (charitable or not) engaged in qualifying theatre productions. The relief is designed to recognise the unique cultural value that theatre brings to the UK and encourage greater and more diverse productions.
TTR provides companies with either a reduction in their corporation tax liability or as is more likely with charities, a cash repayment.
The relief applies to various theatrical productions including:
Any company (charitable or not) that meets the definition of a production company can claim TTR. A production company is a company that produces, runs and closes the production, is engaged in decision-making, and makes creative, technical and artistic contribution to the production.
The production company may be able to claim a repayable tax credit from HMRC. This is calculated as up to 20% of a non-touring production’s qualifying expenditure and, 25% of a touring production’s qualifying expenditure.
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