As you start to look at completing your 2021 individual, partnership and corporate Tax Returns, those in business will have an additional headache this year – making sure that any Coronavirus Grants are declared and taxed properly. So, to help, a quick guide for you:
SEISS Payments 1,2 & 3: These are all taxable on the individual in 2020/21, no matter when received and no matter what your annual accounting date is (either box 70.1 on form SA103F or box 27.1 on form SA103S).
CJRS (and other payments received): These grants (including those to an employer to make furlough payments to staff) are taxable in your accounting period, which may be different to the tax year in which they are received. These should be entered under “Other income and profits” (either box 16 on form SA103F or box 10 on form SA103S). These are counted as business income and are ultimately only taxed if the business has made a profit.
Grants claimed/paid in error: Grants and reliefs paid or claimed in error and have yet to be repaid including CJRS, Eat-out-to-Help-out, etc are to be declared in boxes 1 & 2, of the main SA100 form on page TR5.
Partnerships: The rules for partnerships are slightly different. Whilst CJRS and other payments are also included in “other income” (box 3.24 on SA800), SEISS payments are claimed by the individual partners and should be entered on their individual Tax Returns, not the Partnership SA800 Return. Incorrectly paid/claimed grants, etc are to be included in box 3.118
Companies: Similar entries are required for grants paid to Limited Companies with the required entries being in boxes 471-474 of form CT600
When passing your books to your accountant, take care to highlight these grants to them to assist in the smooth preparation of your annual Tax Returns
For further information on any of the above points or to discuss your affairs generally, please do not hesitate to contact Robin Beadle
