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Step-by-step Guide

Tax on COVID grants

Article ID: 3122
Last updated: 11 May, 2023

During 2020, and continuing throughout 2021, the government provided grants to assist businesses that were affected by the Coronavirus pandemic.

How are COVID grants taxed?

The legislation confirms that all COVID-19 support scheme payments are taxable under either Income Tax or Corporation Tax as appropriate and should be included in the accounts. Specifically:

  • Where the business has ceased they are to be taxed as post-cessation receipts.
  • Payments for more than one business are to be apportioned on a just and reasonable basis.
  • Companies should account for the grants in the profit and loss account so that the income is matched with the costs to which they relate.

Do I need to report COVID grants on a tax return?

Individuals will be required to enter grants received in their 2020/21 SA103 self employment return.

Partnerships will also need to disclose these within the trading pages. HMRC has provided specific boxes for disclosing the amounts.

Please refer to our article on: Where do I enter Coronavirus other support grants on an SA100 or SA800.

Companies should continue to report the amounts within their accounts and for CT600's filed after April 2021, HMRC has provided additional boxes for disclosure of overpayments of the Coronavirus Job Retention Scheme (CJRS) and the Job Retention Bonus. Where do I enter Coronavirus grant information in a CT600?

Article ID: 3122
Last updated: 11 May, 2023
Revision: 13
Views: 4134
This article was:  

Also listed in
folder Tax Return Production -> SA100 Individual Return
folder Tax Return Production -> SA800 Partnership Return
folder Tax Return Production -> CT600 Corporation Tax Return