HL Deb 26 October 1987 vol 489 cc405-6WA
Lord Houghton of Sowerby

asked Her Majesty's Government:

Whether expenses of "sponsorship" of sport. the arts and similar activities are deducted from profits taxable under Schedule D and Corporation Tax and, if so, under what conditions: and what is the approximate total of revenue annually foregone in this area of tax benefits.

The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)

Sponsorship payments which are not of a capital nature are deductible for tax purposes in calculating trading profits if they are made wholly and exclusively for the purposes of the payer's trade. In practice, this means that the sole purpose of the payment must be to provide the payer with a benefit—often in the form of advertising—commensurate with this expenditure. No separate data are available from which to make reliable estimates of the amount of revenue forgone under this head.