Taxpayers who received Coronavirus business support must remember that COVID-19 grants or payments are taxable and must get declared on company tax returns.
HM Revenue & Customs (HMRC) has issued a reminder that the filing deadline for 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 you claimed the Coronavirus Job Retention Scheme (CJRS), Eat Out to Help Out (EOHO) or any other local authority/government support payment, you must report it as income when calculating taxable profits.
Company tax return
If you received a CJRS grant or an EOHO payment, you need to do both of the following:
- Include it as income when calculating your taxable profits in line with the relevant accounting standards
- Report it separately on your Company Tax Return using the CJRS and EOHO boxes
All other taxable COVID-19 payments must get recorded as income when calculating taxable profits.
Have you already filed a return and not declared your grants or payments?
You must submit an amended return, declaring your COVID-19 support payments as taxable income.
CJRS grants or EOHO payments should get reported separately in the segment provided on the CT600 corporate tax return, with additional boxes added on 6 April 2021.
You must update third-party software by downloading the latest version to be able to complete the relevant boxes in the company tax return.
Taxable grants include:
- Test and trace or self-isolation payments in England, Scotland and Wales
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants
When furloughed employees were paid through real-time information (RTI), the employer was responsible for making the usual PAYE, National Insurance contributions (NIC) and automatic enrolment deductions.
Employers must treat the grant as taxable income for Corporation/Income Tax purposes but can deduct employment costs as normal when calculating their taxable profits.
