Profits from donations?

Discussion in 'Accounts & Finance' started by eteb3, Jan 13, 2021.

  1. eteb3

    eteb3 UKBF Regular Free Member

    297 50
    Hi all

    I'm looking at starting a not-for-profit organisation subject to corporation tax. It would publish a website where people can pool useful information - a bit like Wikipedia, but I'll spare you the details.

    It would seek donations from users (or from anyone, really) for the costs - development and hosting, mainly. There might be a possibility of sponsorship, too.

    If there was a surplus of donation receipts over expenses, would it pay tax on that 'profit'? I've read somewhere that donations given to help a company continue in business are taxable just as if they were real trading income - but can't now find it.

    Or possibly this org would be considered non-trading, so no tax liability arises.

    Anyone who can advise?


    PS - full disclosure, I posted a similar question here, but no responses so have rephrased.
    Posted: Jan 13, 2021 By: eteb3 Member since: Jul 18, 2019
  2. Paul Norman

    Paul Norman UKBF Ace Free Member

    2,994 940
    Yes. An excess of donations over costs would be taxable as profit, unless, as I understand it, you become a registered charity.
    Posted: Jan 13, 2021 By: Paul Norman Member since: Apr 8, 2010
  3. Scalloway

    Scalloway UKBF Legend Free Member

    16,770 3,561
    Posted: Jan 13, 2021 By: Scalloway Member since: Jun 6, 2010