COVID-19 grants must be declared on company tax returns

Industry News - 16th February 2022

HMRC has warned that businesses must declare any coronavirus (COVID-19) support grants or payments on their company tax returns and has stated that the grants and payments are taxable.

The deadline for filing company tax returns is 12 months after the end of the accounting period.

The deadline to pay Corporation Tax will depend on any taxable profits and when the end of the accounting period occurs. It is generally nine months after the end of the accounting period unless profits exceed £1.5 million.

Grants to be included as taxable income include:

  • Coronavirus Statutory Sick Pay Rebate
  • Coronavirus Business Support Grants (also known as local authority grants or business rate grants)
  • test and trace or self-isolation payments in England, Scotland and Wales.

If a company received a Coronavirus Job Retention Scheme (CJRS) grant or an Eat Out to Help Out payment, they will need to do both of the following on their CT600 tax return:

  • include it as income when calculating their taxable profits in line with the relevant accounting standards
  • report it separately on their company tax return using the CJRS and Eat Out to Help Out boxes.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘We want to make sure companies are getting their tax returns right, first time, including any COVID-19 support payment declarations. Support and guidance is available on GOV.UK.’

Internet links: HMRC press release , GOV.UK

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