I have a friend who operates a retail business and, with all good intentions, wishes to charge customers a fixed price for using the shop's own packaging (to try and encourage people to use their own reusable packaging). They intend to donate this fully to a green charity. They are a limited company and VAT registered. He's asked me what the best way to do this is. I can only see two possible scenarios; i) As a VAT registered limited company, he can make the charge but will have to account for VAT on it. Conversely, if the company donates all of this money to charity, that will be an allowable deduction against tax, as long as the company is making profits. ii) He makes the charge voluntary and suggests that customers might like to make a donation into a charity box at the till. Has anyone got any other thoughts about how it could be done or about the two possibilities above? (note: we are not talking about plastic bags here!) Thanks.