HomeHMRCCoronavirus grants ‘must be declared on company tax returns’

Coronavirus grants ‘must be declared on company tax returns’

HMRC is reminding companies and their agents that any Coronavirus grants they received to support them during the pandemic are taxable.

It said: “If your client needs to complete a company tax return (CT600) and has claimed grants from the Coronavirus Job Retention Scheme (CJRS), Eat Out to Help Out (EOTHO), or any payments made by local authorities and devolved administrations, they’ll need to report this as income when they calculate their taxable profits.

Accountants urged to focus on clients’ Coronavirus grants

“If you are completing a company tax return on your client’s behalf, you will need to check the Coronavirus grants they received.”

The Revenue also added that they will need:

  • To declare the amount they received (box 471).
  • The grant they were entitled to (box 472).
  • Any CJRS overpayment already assessed or voluntarily disclosed (box 473) during the accounting period covered by their CT600 return.

Grants must be declared as income

HMRC said: “They will need to complete box 474 if they received any EOTHO overpayments. They must also include the grants as income when they calculate their taxable profits.

“These boxes were added to the online CT600 on 6 April 2021, so if your clients filed before 6 April 2021, they would have been unable to declare this online.

“If you or your client submitted a CT600 return without boxes 471-474 and 526, or left the boxes incomplete, and they have a CJRS or EOTHO overpayment to report they should resubmit the return.

“If all Coronavirus support overpayments are already repaid or have already been assessed before the tax return is filed – and there’s no Coronavirus support schemes overpayment due – they do not have to correct the return.”

HMRC’s reminder follows a warning from the tax authority and National Audit Office in September, which estimated that between 5-10% of furlough money claimed could represent overclaims – errors that HMRC would pursue businesses years for, according to one employment tax expert.

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