Member

Profit, by contrast with revenue, provides a clearer indication of a company’s financial position, because it reflects what remains after expenditure has been met, including tax liabilities. Our intention is not simply to identify companies that have generated income, but to ensure that political donations are supported by genuine economic activity and financial substance. A profit-based test is a stronger indication of that than turnover alone. The amendments establish a clear statutory framework for applying the profit test. We understand that, naturally, companies can face legitimate fluctuations in their profits, so companies will be able to demonstrate profit over a five-year period.