Companies will need to include COVID support grants as income in their accounts in line with accounting standards and also report it separately in the relevant box on their tax return. HMRC has reiterated that taxable grants and support payments include:
- Self-Employment Income Support Scheme (SEISS)
- Test and trace or self-isolation payments in England, Scotland and Wales
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants (also known as local authority grants or business rate grants)
- Coronavirus Job Retention Scheme (CJRS) grant
- Eat Out to Help Out payments
Similarly, self-employed taxpayers will also have to disclose the grants separately on their return.
As a reminder, CJRS and SEISS grants to which taxpayers are not entitled are recovered by means of a 100% income tax charge. This is the case even where the recipient is a company.
Taxpayers are required to notify HMRC and repay amounts to which they are not entitled, generally within 90 days. If an overpayment has not been notified and repaid by the time the relevant tax return is filed, taxpayers are required to notify and repay the overpaid grant via the tax return. Income tax and corporation tax returns include specific sections for reporting grants to which the taxpayer is not entitled.
Reporting coronavirus (COVID-19) grants and support payments – GOV.UK
TAXguide 12/21 COVID-19 support grants tax considerations
HMRC webinar: Declaring your grants on your Company Tax Return (CT600)
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