Fandango

My client runs a dance school as a sole trader. Each year she stages a show purely as a fundraiser for a charity. Am I right in thinking that the small profit of £3 500 should be declared as income?

All of the £3 500 was donated to the charity and I have asked her if this was done under gift aid.

The charity have said that it was not and that if she wishes to do this then she needs to send them 25 pence for each £1 donated which she in turn can ‘reclaim from the government’. That is another £875 which of course she does not have.

My feeling is that the charity could and should treat the £3 500 as tax inclusive and then my client can claim under gift aid. Am I correct on both counts?

I look forward to advice from readers.

Query...