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Accounting for CJRS Grants

Are these classed as income or should they be netted against payroll costs?

Didn't find your answer?

My guess... they are a grant so classed as income.

Replies (21)

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By pauld
07th Jul 2020 17:36

that's a great guess. Well done.

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RLI
By lionofludesch
07th Jul 2020 17:53

Apparently HMRC want to see them on the return so they know you've not forgotten them.

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Replying to lionofludesch:
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By Paul Crowley
07th Jul 2020 18:49

SEISS, new box expected for SA return.
CJRS, bit of a problem as will be mostly companies.
For most will be irrelevant as all that matters is that they are taxed. And NI'd if not company.
I avoid dumb dates, but some will need to decide fairly soon

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Replying to Paul Crowley:
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By lionofludesch
07th Jul 2020 19:02

Paul Crowley wrote:

CJRS, bit of a problem as will be mostly companies.

How so ?

It needs entering as other income (because HMRC say so) and matching in accordance with accounting standards.

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Replying to lionofludesch:
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By Paul Crowley
07th Jul 2020 19:09

Seiss is on SA return to 2021

No specified return box for CJRS
Do HMRC really say there is a box or that it must be income?
SSAP accounting for grants if it still existed would disagree.

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Replying to lionofludesch:
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By Paul Crowley
07th Jul 2020 19:11

lionofludesch wrote:

Apparently HMRC want to see them on the return so they know you've not forgotten them.

What return?

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Replying to Paul Crowley:
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By lionofludesch
07th Jul 2020 19:22

Paul Crowley wrote:

lionofludesch wrote:

Apparently HMRC want to see them on the return so they know you've not forgotten them.

What return?

SA or the company accounts, via tagging.

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Replying to lionofludesch:
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By Paul Crowley
07th Jul 2020 19:42

What tags on SA fot ye 5 April2020 or 30 April 2020

3 Line accounting for quite a few

Cash accounting still exists

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Replying to Paul Crowley:
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By lionofludesch
07th Jul 2020 20:03

HMRC said they wanted CJRS showing as income rather than deducted from wages.

I'm just guessing they meant that.

For your 3 line accounts, I'd guess that means including it with sales.

Maybe we'll have some guidance. We'll just have to see.

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By greenhat
07th Jul 2020 18:23

It now occurs to me that we might have a VAT issue.

I work for a charity. Our income (not including the grant) is down 95% in Q1. We'd normally do a partial exemption calculation and recover about 65% of VAT.

Problems, problems...

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Replying to greenhat:
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By lionofludesch
07th Jul 2020 18:36

greenhat wrote:

It now occurs to me that we might have a VAT issue.

I work for a charity. Our income (not including the grant) is down 95% in Q1. We'd normally do a partial exemption calculation and recover about 65% of VAT.

Problems, problems...

Well, maybe you should expand on that point and think about whether the question you asked is the question you should be asking. The grant isn't exempt and, if you can't claim as much VAT as usual, it's nothing to do with CJRS.

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Replying to lionofludesch:
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By greenhat
07th Jul 2020 22:08

lionofludesch wrote:

greenhat wrote:

It now occurs to me that we might have a VAT issue.

I work for a charity. Our income (not including the grant) is down 95% in Q1. We'd normally do a partial exemption calculation and recover about 65% of VAT.

Problems, problems...

The grant isn't exempt and, if you can't claim as much VAT as usual, it's nothing to do with CJRS.

Sorry, if it isn't treated as exempt (for VAT) then what is it?

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Replying to greenhat:
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By Paul Crowley
07th Jul 2020 22:22

Outside the scope

Which is the result you prefered, as not exempt

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By lionofludesch
07th Jul 2020 22:20

greenhat wrote:

Sorry, if it isn't treated as exempt (for VAT) then what is it?

That's the question to ask!!

Outside the scope. Leave it out of your VAT calculations altogether.

And maybe have an accountant review what you've been submitting.

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By lionofludesch
07th Jul 2020 22:21

..

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By WeFileIT
07th Jul 2020 20:12

It has to be shown as other income (which is taxable), it should never be deducted from your payroll expenses.

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By Paul Crowley
07th Jul 2020 21:17

Bigger problem is the local authority grant.
Recognised on receipt or when became entitled? Entitled March?
Given that its use would be during lockdown.
Inflated profit for March year end, but serious drop in profit the year after?

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Replying to Paul Crowley:
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By lionofludesch
07th Jul 2020 21:31

Paul Crowley wrote:

Bigger problem is the local authority grant.
Recognised on receipt or when became entitled? Entitled March?

April wasn't it ?

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Replying to lionofludesch:
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By Paul Crowley
07th Jul 2020 22:24

Applied and received in April where I am. Others did not get until May.
But I have seen a commentry suggesting entitlement occurred in March.

My opinion is that so long as it taxed, is exact timing really that critical?

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Replying to Paul Crowley:
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By SXGuy
08th Jul 2020 09:26

My y/e is March. Had a battle with LA to recover the grant, finally received it in May.

Whether its meant to go in March or May I'm leaving it as when it was received. Either way tax is 19% (Ltd) so let them argue the case if it ever came up. We all have more important matters to worry about.

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Replying to SXGuy:
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By Paul Crowley
08th Jul 2020 13:52

Agreed. I intend to use received date for everybody. Tax timing is neither avoidance nor evasion.

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