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Accountants told to remind clients to declare Covid grants on tax returns

Tax agents and accountants should remind their clients that Covid-19 support grants or payments are taxable and need to be declared on their company tax returns, HMRC is advising.

This reminder follows one from the tax office in November 2021, reported on here.

The deadline for customers or agents filing company tax returns (CT600) is 12 months after the end of the accounting period it covers. The deadline to pay Corporation Tax will depend on any taxable profits and when the end of the accounting period occurs.

If companies received taxable Covid-19 support grants or payments they should make sure it is recorded 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 CT600 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’.

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