baglady wrote:
mdmac wrote:
Ultimately, TPV is a Ltd company.
When you look at companies house, how many of those new businesses are funded off donations?
The only reason Dicke et al are saying it's non profit is because it might not making a profit right now, as the business owners, that hit is theirs, in the same way it is for anyone setting up a business.
When it turns a profit without the begging plate (which i'm sure will remain), are they going to give money to their great unquestioning brainwashed ?
...
I'm trying to find out if donations are considered part of the revenue stream. If tpv was a registered charity - a real not for profit entity - then donors could claim tax relief and tpv would claim tax relief. Interesting on
www.hmrc.gov.uk/charities/tax/trading/subsidiary.htm is the fact that tpv could have been set up as a charity but use a subsidiary to carry out trading activities and not be restricted as a charity.
Oh my god!!!
It's a circular tax dodge
www.hmrc.gov.uk/charities/tax/trading/subsidiary.htm
Why use a subsidiary trading company?
Under charity law, a charity is not allowed to carry out non-charitable trading. That is because non-charitable trading could put the assets of the charity at risk.
Your charity might want to use a subsidiary trading company to:
carry out non-charitable purpose trading on a much bigger scale than your charity would be allowed to under charity and tax law
protect your charity's assets from the risks of trading - in case the turnover from the business venture wasn't enough to cover the costs of carrying on the trade
set up a separate administrative unit for accounting or management purposes
A subsidiary company can take advantage of the tax relief available for charitable donations. If your charity's subsidiary company gives all or part of its profits to your charity then it won't have to pay any tax on the profits it donates.
Your charity might use a subsidiary trading company for ventures that place its assets at risk if it carried on the trading activity itself. If the tax benefits are the main reason for considering setting up a trading subsidiary. it might be wise to get professional accountancy and legal advice. It might turn out that the advantages are not enough to justify the costs of setting up and running the subsidiary.
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Tax and tax relief for your subsidiary trading company
If your charity sets up a subsidiary trading company to generate income, the trading company itself isn't a charity. It's an ordinary limited company and has to pay Corporation Tax on its profits.
But, like any other company, it can get tax relief on charitable donations it makes. So if your charity's trading subsidiary makes payments in the form of donations to your charity it can reduce the amount of Corporation Tax it pays. If it donates all its taxable profits to your charity it will pay no Corporation Tax at all.
Your charity's trading subsidiary pays the donations to your charity without taking off any tax. It gets tax relief for these donations. Your charity doesn't pay tax on the amounts it receives provided it uses the money for its charitable purposes.
When can the trading subsidiary make donations?
It's up to the directors of the trading company when to make the payments. Putting them off for a while could help with the company's cash flow. The relief is normally given for the relevant accounting period when paid. But provided a donation is made to its parent company within nine months of the end of a particular accounting period, a company wholly owned by one or more charities can choose to treat the donation as if it was paid in that earlier accounting period. A claim to carry back a gift in this way must be made within two years of the end of the accounting period to which the gift relates.
Find out about gifts to charity made by companies
Get more information about Corporation Tax