ICAEW.com works better with JavaScript enabled.

TAX NEWS

The tax implications of COVID support schemes

Article

Published: 25 May 2021 Update History

As HMRC confirms delays in processing self assessment returns with incorrectly reported SEISS grants, the Tax Faculty has published guidance for all ICAEW members on the tax issues arising from the UK’s coronavirus support schemes.

The government’s COVID-19 financial support schemes, namely the Coronavirus Job Retention Scheme (CJRS) and Self-employment Income Support Scheme (SEISS) give rise to a number of tax issues, separate from the rules that apply to the schemes themselves.

To support members and their clients, ICAEW’s Tax Faculty has published TAXguide 12/21 which provides practical support on key issues, such as how to report grants on tax returns and how to report overpaid grants.

The guide, which is freely available to all ICAEW members, starts by outlining the tax treatment of grants. For example, CJRS grants are subject to income or corporation tax and follows accounting treatment required by GAAP, meanwhile SEISS grants are subject to income tax and class 4 national insurance contributions, generally in the year in which they are received.

The faculty also outlines the tax charges for grants that have been claimed by recipients that are not entitled to them, and the obligations on taxpayers to notify and repay grants.

The guide also highlights the professional conduct considerations for agents making CJRS claims on behalf of clients. It links to ICAEW’s suggested engagement letter schedules for such work and includes links to relevant parts of the Professional Conduct in Relation to Tax standard.

The guide ends with links to additional ICAEW support to help members with CJRS and SEISS, including a helpsheet from ICAEW’s Technical Advisory Service on ethical issues and a joint publication with the Financial Reporting Faculty on accounting and tax consequences.

Hear more at Virtually Live!

ICAEW's flagship digital conference returns for 2021 and includes sessions on tax. Hear from experts including Rebecca Benneyworth and ICAEW's Anita Monteith.

ICAEW's flagship digital conference returns for 2021. Virtually Live will be held on 15-17 June 2021
More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty
Tax Faculty

This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

Open AddCPD icon

Add Verified CPD Activity

Introducing AddCPD, a new way to record your CPD activities!

Log in to start using the AddCPD tool. Available only to ICAEW members.

Add this page to your CPD activity

Step 1 of 3
Download recorded
Download not recorded

Please download the related document if you wish to add this activity to your record

What time are you claiming for this activity?
Mandatory fields

Add this page to your CPD activity

Step 2 of 3
Mandatory field

Add activity to my record

Step 3 of 3
Mandatory field

Activity added

An error has occurred
Please try again

If the problem persists please contact our helpline on +44 (0)1908 248 250