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HMRC internal manual

Business Income Manual

Specific deductions: gifts in kind and payroll giving: relief for gifts of medical supplies and equipment by companies: details of the relief

S107-S108 Corporation Tax Act 2009

No proceeds brought into trading profits where medical supplies and equipment are donated

Companies are able to obtain tax relief for donations of trading stock of medical supplies and/or medical equipment for humanitarian purposes (see BIM45190). No amount is brought into account in calculating the trading profits in relation to the stock given away.

This relief applies if the medical supplies and equipment are for human use. For details of the interpretation of ‘medical supplies’ and ‘medical equipment’, see BIM45185.

The company can also deduct the expenses of transportation, delivery and distribution of these donated medical supplies and equipment from its trading profits. The deduction is allowed in the accounting period in which the costs are incurred.

As explained in BIM45175, there is no requirement in the legislation for the trader to make a claim for this relief as it applies automatically.

As no trading receipt is to be treated as arising, for tax purposes, on the gift, the trader obtains full relief for the cost of acquisition or manufacture of the supplies and equipment in question.

Benefit received which is attributable to the gift

Exceptionally, if the company or any connected person receives a benefit from the making of the gift, the amount of the benefit is to be brought into charge as a taxable profit. An example would be if a UK manufacturer donated products on the understanding that an overseas affiliate was given preferential terms for the supply of other goods or services.

The definition of ‘connected persons’ is in S1122 and S1123 Corporation Tax Act 2010.

Reliefs for other donations

For details of the relief available for donation of trading stock which does not include medical supplies and equipment, see BIM45155.

For details of the relief available where plant and machinery is donated to charities and other qualifying bodies, see BIM45165.