Partnerships, like individuals, can give cash under Gift Aid enabling the charity to reclaim the basic rate tax, worth £28 on a donation of £100. For incorporated businesses, charitable donations are treated as a tax-deductible expense so the tax benefit goes to the donor, not the charity; if a company pays corporation tax at 28%, a donation of £139 will only cost it £100. To gain maximum relief, groups of companies should make donations from the company that pays the highest rate of corporation tax.
Giving assets, such as land or buildings, to a charity is usually more effective than selling them and giving the charity the cash. Sponsoring a charity is usually tax-deductible, as long as it is not a back-door way of funding your hobbies. Trading stock and plant and machinery can be donated to charity tax-free and the employment costs of staff seconded to a charity are tax-deductible. There is no general VAT relief on charity donation however, so you cannot easily recover any VAT incurred in manufacturing donated goods.
Another worthwhile way to support charities is via payroll giving. The Government is keen to encourage this, with grants of up to £500 to smaller and medium-sized firms to meet the set-up costs and a pledge to match employee donations up to £10 a month for six months. Payroll giving is also the easiest way for employers to match their employees' donations and many take this opportunity.