ICAEW.com works better with JavaScript enabled.

TAX NEWS

Businesses reminded to declare COVID support grants in tax returns

Article

Published: 19 Jan 2022 Update History

Companies and unincorporated businesses are taxable on COVID support grants and payments. ICAEW’s Tax Faculty provides a summary of available resources to help ensure tax returns are correctly completed.

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.

Further information

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)

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.

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

More from the Tax Faculty

Latest news
Making tax digital image
TAXwire

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance
Cover
TAXline

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image
Webinars

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.

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