Corporate generosity

My client runs a one-man company that has done very well. He now wishes to make a substantial donation (£100 000) to what he regards as a good cause but which is not a charity: the organisation promoting the continuation of the UK Better Together.

I am satisfied that the company’s constitution allows him to decide to make such a payment directly from the company and it has sufficient money and profit and loss account balance to do so – but I am concerned about the possible tax implications.

Clearly if the company paid him a salary or dividend to give him £100 000 in net cash which he then gave away the tax cost would be much more substantial than if the company made the payment directly. That is why I am wondering whether there could be any hidden tax charge if the...