BTC Can Anyone help

zakira

Hi Can Anyone Help

I was just doing the BTC 2010 June paper and a can across a situation that confused me. I was hoping someone maybe able to clarify something for me. It was on Task 2.2, the answer allowed Local Charity to be an allowable expense because it was not added back, but then the national charity was a non allowable expenses this was added back. Is this correct and why is this? I have the Osborne book and I do not remember them ever discussing this and I am a bit confused about it.

NickyW

Yes this is right. Donations to national charities are not allowed but charities to local charities are allowed - I think it is because it can be seen as advertising if it is donated to a local charity. Any other donations to national charities are disallowed but then if they are gift aided they are deducted from the trading profits as charges on income when calculating the PCTCT.
I think this is right - I too am sitting BTC this time - so if I am wrong - please feel free to correct me!
Nicky

bozena

I am aslo preparing for BTC in December. So charitable donations (not made under Gift Aid-these are dealt in another part of income tax form) if it is wholly and exclusively for trading purposes (egz. promoting business' name) and it is to a local charity IS ALLOWABLE.

National charity donations ARE NOT ALLOWABLE.

Hope this help
Bozena

zakira

Thanks you for your answers... I think that it is understandable now.