Corporation Tax Act 2010 section 197

Restrictions on associated benefits

Section 197 sets out the two tests that determine whether the restrictions on benefits a company receives in return for making a qualifying charitable payment have been breached.

• If the benefit received in connection with a single payment exceeds a variable limit (25% of payments up to £100, or £25 plus 5% of the excess over £100 for larger payments), the restrictions are breached (Condition A — the "benefit per payment" test).
• If the total value of benefits associated with all qualifying payments made by the company to the same charity in the accounting period exceeds £2,500, the restrictions are breached (Condition B — the "benefit per accounting period" test).
• A relevant prior payment for Condition B is any qualifying payment the company has already made to the same charity earlier in the same accounting period.
• Both conditions apply to any benefit "associated with" a payment, and this section should be read alongside section 198, which provides further detail on how associated benefits are identified and valued.