Businesses reminded to declare Covid-19 grants on tax returns

HM Revenue and Customs (HMRC) is reminding businesses that Covid-19 support grants or payments are taxable and should be declared on their company tax returns.

It states that any fish and chip shop that received taxable Covid-19 support grants or payments must record it as income when calculating taxable profits.

Taxable grants include:

  • 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)

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 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 service, 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, just search ‘file my company tax return’.”

Information on which support payments need to be reported to HMRC and any that do not is available on GOV.UK.

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.