Qualifying charitable donation (UK corporation tax)
A company’s qualifying charitable donations are generally deducted from total profits in calculating taxable total profits for the accounting period in which paid, subject to statutory conditions and ordering. The deduction cannot reduce taxable total profits below nil; different rules apply to other kinds of donation and to permitted group relief. Company donations are not computed using the individual Gift Aid gross-up mechanism.
Worked example
A company has £80,000 total profits after relevant prior reliefs and pays a qualifying £12,000 cash donation in its 2025–26 accounting period. Assuming no further adjustments or group claim, its taxable total profits are £68,000.
Common mistake
Deducting the company’s qualifying cash donation twice, grossing it up as if it were an individual Gift Aid payment, or treating the deduction as creating a trading loss.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |