A recent case before the Court of Appeal determined that the company in question was not allowed tax relief on their sponsorship of a rugby club, as there was “duality of purpose”. The payments in question were posted to “marketing and advertising” in the company’s accounts. In order to secure tax relief against trading profits, the expense must be incurred “wholly and exclusively” for the purpose of the trade. In this case, the problem was that the rugby club was in financial difficulty and the judges held that the payments by the company were intended to provide financial support, as well as advertising. This decision does not mean that all sponsorship payments will be disallowed – just those made under similar circumstances. Note that where the club in question is established as a Community Amateur Sports Club (CASC) to benefit the local community, the latest Finance Act now specifically allows a deduction against company profits for donations from 1 April 2014 onwards. This tax relief is in line with the relief for corporate donations to charities.