Company sponsorship

RedEvo · #1 (**permalink**) 11-05-2008, 19:23

Can my own Ltd company sponsor me? One of my hobbies, competitive ballroom dancing, is costing me a small fortune (lessons cost £60/hr) and I'd like my company to sponsor me.

Yes or no?

d

IP2 · #2 (**permalink**) 11-05-2008, 19:58

Your Limited Company is a totally separate legal entity to you yourself so in theory there is no reason why it can't sponsor you. If you have other shareholders you may need to justify the expense, but as far as the tax office is concerned that is the legitimate cost of advertising!

Peter W · #3 (**permalink**) 11-05-2008, 20:35

You need to be a bit careful about this. See http://www.hmrc.gov.uk/manuals/bimmanual/BIM42565.htm

RedEvo · #4 (**permalink**) 11-05-2008, 20:58

"If the novice sports person is a relative or associate of the proprietor/director(s), then there may also be a non-business purpose to the sponsorship as in Executive Network (Consultants) Ltd v O'Connor. If so, the whole of the expenditure is disallowable."

Looks like it's a no then ;(

d

IP2 · #5 (**permalink**) 11-05-2008, 21:01

Quote:

Originally Posted by Peter W

You need to be a bit careful about this. See http://www.hmrc.gov.uk/manuals/bimmanual/BIM42565.htm

Poppycock! Let HMRC prove it!

Most of the Government officials I see, don't have the faintest idea what day it is, let alone what their hidden rules are!

I am sorry Peter, but if everyone followed the advice of accountants, solicitors and government bollocks the country would come to a grinding halt tommorrow!

Edit: Should have included a few

in this post!! Just seemed crazy that you could legally sponsor a complete stranger, but not yourself. Anyway - take this post with the pinch of salt it deserves!

DavidT · #6 (**permalink**) 18-05-2008, 07:09

I understand where IP2 is coming from... but I think you have to consider the situation a bit more.

If a business sponsors a complete stranger, it will almost without a doubt, be for business purposes. Whereas sponsoring a shareholder/director certainly raises doubts as to whether or not it's for business purposes (as is the case here!).

If it can be shown as wholely for the purpose of the business - it is allowed. How might tax be otherwise?

David Toohey
The Accountants Circle

boxby · #7 (**permalink**) 18-05-2008, 13:59

Either way there'd be no problem with the company sponsoring you, the only issue is whether or not it would be allowed as a taxable deduction. But these are two seperate things.

Chris(tina!) · #8 (**permalink**) 18-05-2008, 21:48

I kind of agree with Boxby and also think there would be issues if you are a 'controlling director' which I assume you are - raises all kinds of issues in all kinds of areas (links to DavidT's point as well!).