Dorchester Chamber for Business Vice President Steve Bulley has been investigating the taxable status of COVID-19 grants and payments.
Grants and payments from schemes to support businesses and self-employed individuals during coronavirus (COVID-19) are taxable.
Who should report a grant or support payment
If you received a payment to support you during COVID-19, you may need to report this on your tax return if you are:
- in a partnership
- a business
Which payments you need to report
You need to report grants and payments from COVID-19 support schemes. These include:
- the Self-Employment Income Support Scheme (SEISS)
- test and trace or self-isolation payments in England, Scotland and Wales
- the Coronavirus Job Retention Scheme (CJRS)
- Eat Out to Help Out
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants
Coronavirus Business Support Grants
These are grants or payments made by one of the following:
- local authorities
- devolved administrations
- any other public authority
They are also known as local authority grants or business rate grants.
Examples of these grants in England include:
- Small Business Grant Fund
- Retail, Hospitality and Leisure Grant Fund
- Local Authority Discretionary Grant Fund
- Fisheries Response Fund
Examples of these grants in Wales include:
- Welsh Government Business Grants (Grants 1 and 2)
- Economic Resilience Fund
Examples of these grants in Scotland include:
- Business Support Fund
- Newly Self-Employed Hardship Fund
- Creative, Tourism and Hospitality Enterprises Hardship Fund
- Pivotal Enterprise Resilience Fund
- Aquaculture Hardship Fund
- Sea Fisheries Hardship Fund
Examples of these grants in Northern Ireland include:
- Small Business Support Grant Scheme
- Retail, Hospitality, Tourism and Leisure Grant
- other business related coronavirus emergency and hardship funds
If you have received a Coronavirus Business Support Grant, it is taxable.
There are some exceptions, for example, if the grant was made to a mutual trading organisation.
How to report a grant or payment
Self Assessment tax return
SEISS payments should be placed in the Self-Employment Income Support Scheme Grant box on your Self Assessment tax return. You should record all other taxable COVID-19 payments in the any other business income box.
If you’re self-employed, find out how to report your grant or payment using:
If you’re in a partnership, find out how to report your grant or payment using:
Company Tax Return
If you received a Coronavirus Job Retention Scheme grant or an Eat Out to Help Out payment, you will 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 Coronavirus Job Retention Scheme and Eat Out to Help Out boxes
You should record all other taxable COVID-19 payments as income when you calculate your taxable profits.
Which payments you do not need to report
You do not need to report a coronavirus (COVID-19) support payment on your Self Assessment tax return if this is a welfare payment made by a council to an individual, for example to help with:
- council tax payments
- housing benefit
Coronavirus Business Interruption Loan Scheme loans and Bounce Back loans are not coronavirus support payments or grants. You do not need to report these on your tax return.
Help and support
If you are not sure if the COVID-19 support payment you received is taxable or you would like further help, you should contact the Coronavirus (COVID-19) helpline.
If you are not a member of the active local Chamber, its time to join for just £60 per year, see www.dorchesterchamber.co.uk/join-us/