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COVID-19 support grants must be included on company tax returns

13 Jan 2022

HMRC has warned that businesses must declare any coronavirus (COVID-19) support grants or payments on their company tax returns and stated that the grants and payments are taxable.

The deadline for filing company tax returns is 12 months after the end of the accounting period it covers.

The deadline for taxpayers 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.

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 Services, 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.'

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Chartered Tax Adviser

Registered in England, Company Registration number – 7906656. Registered Office – 58b High Street, Stony Stratford, Milton Keynes, MK11 1AQ. Registered with the Chartered Institute of Taxation as a firm of Chartered Tax Advisers. Registered to carry out audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.