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COVID-19 support on company tax returns

21 February 2022 : Industry News

Covid support on COVID tax returns

Businesses that received financial support to help lessen the uncertainty caused by the pandemic have been urged to include these in their next tax return. 

Any applicable grants or support payments introduced by the Government are taxable income and HMRC has reminded businesses to make sure they are reported correctly. 

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

What COVID support payments and grants need to be included?

  • Coronavirus Job Retention Scheme (CJRS)
  • Eat Out to Help Out (EOHO)
  • Coronavirus Statutory Sick Pay Rebate
  • Self-Employment Income Support Scheme (SEISS)
  • Test and trace or self-isolation payments in England, Scotland and Wales
  • Coronavirus Business Support Grants

Coronavirus Business Support Grants are those that were made by local authorities, devolved administrations or any other public authority. These include things such as the Small Business Grant Fund, Retail, Hospitality and Leisure Grant Fund and the Local Authority Discretionary Fund. Anything under this term is taxable income and needs to be included. 

What do I need to do? 

If your company received any of the above payments, they will need to do the following on your CT600 tax return:

  • Include it as income when calculating their taxable profits in line with the relevant accounting standards

The Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) are not coronavirus support payments or grants and you will not need to report these on your tax return.

How many used the schemes? 

The grants and support schemes were vital for businesses during the pandemic and many took advantage of them to safeguard the health of their business. 

Over 1.3 million employers used the Coronavirus Job Retention Scheme or furlough as it was better known. A total of 11.7 million jobs were furloughed and £70 billion was claimed. 

Other measures included over 2.6 million of those self-employed making an SEISS claim and 49,000 eateries were supported by EOHO. 

How we can help

If you’d like to talk it through with us and get some initial advice on the next steps, please give your Client Services Manager a call on 01782 279615 for Stoke or 0161 236 7677 for Manchester.

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