City Academies: Sponsorship

Mr. Austin Mitchell
To ask the Secretary of State for Education and Skills what tax relief can be claimed by sponsors of academy schools on £2 million contributions.

Jim Knight
Where an academy sponsor makes the payment wholly and exclusively for the purposes of their trade and does not receive a capital asset in return, they are entitled to a deduction in their business profit and loss account. As academy schools are charities, any sponsorship payment that could not be claimed as an allowable expense would normally qualify for tax relief as a charitable donation. Payments made to academy schools by educational charities would be treated as charitable expenditure by the sponsoring charity.