Reminder for companies to include grants on returns
HMRC has published new guidance to companies about the taxation and reporting of coronavirus support payments. What steps should companies take to ensure that the tax return is correct?
Lack of information
Over the last year or so unincorporated businesses have been bombarded with guidance from HMRC about declaring coronavirus support payments. By comparison, guidance for companies has been sparse but HMRC has now updated its guidance.
Corporation tax return
When completing a company self-assessment tax return or checking one prepared by an accountant, HMRC says that special care is needed regarding Coronavirus Job Retention Scheme (CJRS) grants and Eat Out to Help Out payments. If a company received either or both types of payment in the corporation tax (CT) period covered by the return, it must both:
- include it as income when calculating taxable profits in line with the relevant accounting standards; and
- report it separately on the company tax return using the special CJRS and Eat Out to Help Out boxes.
How much to declare
When calculating the amount of CJRS payments to declare in Box 471 on the company’s CT return it must not deduct any amounts:
- which were voluntarily disclosed to HMRC as CJRS overpayments, even if the company has repaid them
- that have already been assessed by HMRC, even where the company accepted and paid the assessment
- received that the company was entitled to but repaid voluntarily.
Conversely, the company must add any overpayments of amounts received in an earlier CT period that have been set off against CJRS payments received in the accounting period for which it is now completing a tax return
Related Topics
-
HMRC writes to non-domiciled taxpayers following rule changes
HMRC has begun issuing “one-to-many” letters to individuals affected by recent changes to the tax rules for non-UK domiciled taxpayers. The letters prompt recipients to review their tax position under the new regime. What does this mean if you receive one?
-
Can officers ignore minor input tax errors?
If your business has claimed input tax on an invoice where the supplier has charged VAT incorrectly, HMRC can disallow your claim by issuing an assessment. Can the officer waive that power to achieve a common sense outcome?
-
Practical guide: Tax-efficient will planning with residential property
An individual has a significant property portfolio which provides them with their sole source of income. They want to gift shares in some property to their daughter but retain the income. Can they do this without triggering the reservation of benefit rules?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.