The COVID-19 support grants (CJRS, SEISS and Eat Out to Help Out) are taxable and should be declared on your business' tax return. For corporation tax (CT) you must report amounts received in the accounting period covered by the return, not grants claimed for the period and paid in a later period.
The first CJRS grants were paid in April 2020 but the CT return forms were not amended to include special boxes to report those grants until September 2021. If your CT return was submitted before the new version of the form was released the grant figures will not be easy to spot.
If HMRC cannot match the reported CJRS grant on the CT return to the amount paid to the company it will write to request an explanation.
If you receive such a letter please talk to us as soon as possible. It is important to take the letter seriously and reply with 30 days, as failure to do so may trigger a formal tax enquiry into your business.
We will either amend the CT return to include any omitted COVID-19 grant income or confirm to HMRC that all grant income has been included within reported income.
This article is from the latest issue of our A Matter of Tax Newsletter. To receive future copies of any of our newsletters directly to your inbox please visit our preference centre and register your interest.
If you have any questions about the above, or would like more information specific to your circumstances, please enter your email address below and we will get in touch:
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