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> In the UK, such sponsorships will be tax deductible only if you can answer this question in a satisfactory manner As long as you can show the directors aren’
by peteretep 6y ago
> In the UK, such sponsorships will be tax deductible only if you can answer this question in a satisfactory manner
As long as you can show the directors aren’t benefiting indirectly from this then I think it’s unlikely to be an issue, especially if you’re using the libraries in question? HMRC don’t require you to prove that you’re running your business to maximise profit, just that you aren’t disguising director payments as expenses.
- petercooper 6y agoYou're not wrong, but it's also more complex than that. They could choose to apply "commerciality tests" which include things like whether you're paying over the odds or whether other forms of sponsorship would have a better commercial effect. https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim42565 https://www.gov.uk/hmrc-internal-manuals/business-income-man... is HMRC's own guidance to its tax inspectors on some of these points. For example, if my company fancied donating £1000 a month to the curl project because we think it's a fantastic tool worth supporting (it is!) but we only use it in a handful of scripts, HMRC might give us some grief if it came up in an inspection. I dare say given the expected technical knowledge of the average tax inspector that a typical HN reader could prevail in such a challenge ;-)
- peteretep 6y agoThat’s a very interesting read, thank you!