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Gloucestershire Business News

Don't forget Covid grants on tax returns, says HMRC

Covid grants are taxable, that's the reminder from the tax office.

HM Revenue and Customs is urging tax agents and accountants to remind their clients that the support grants or payments are subject to tax and should be declared on company tax returns.

The deadline for customers or agents filing company tax returns is 12 months after the end of the accounting period it covers. The deadline to pay Corporation Tax will depend on taxable profits and when the end of the accounting period occurs.

Companies that received taxable COVID-19 support grants or payments they should make sure this is recorded as income when calculating taxable profits.

The taxable grants include:

• test and trace or self-isolation payments

• Coronavirus Statutory Sick Pay Rebate

• Coronavirus Business Support Grants (also known as local authority grants or business rate grants)

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

• report it separately on their Company Tax Return

Myrtle Lloyd, HMRC's Director General for Customer Service, said: "We want to make sure companies are getting their tax returns right, first time, including any COVID-19 support payment declarations."

The deadline for Self Assessment customers to complete their 2020/21 tax return and pay any tax owed is 31st January 2022.

Last week, HMRC announced they would waive penalties for one month for late filing of tax returns and late payments.

Interest will be payable from 1st February on outstanding balances.

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