Are you a new business? Or an existing business interested in our services?Get a quote
HMRC is urging tax agents and accountants to remind their clients that Covid-19 support grants or payments are taxable and should be declared on their company tax returns
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.
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:
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:
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.
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’.’
The deadline for self assessment taxpayers to complete their 2020/21 tax return and pay any tax owed is 31 January 2022.
Last week, HMRC announced it would waive penalties for one month for late filing of tax returns and late payments. The changes mean:
Interest will be payable at 5% from 1 February on outstanding balances.
Contact us if you need advice
Brearley & Co Accountants are pleased to offer a free, no obligation, initial consultation with one of our experts who will be happy to discuss your business needs and how we can help you.Contact