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Tax & NIC and Covid grants

How do we treat the various grants etc received for business clients with non 31/3 or5/4 year ends

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Sch 16 of Finance Act 2020 https://www.legislation.gov.uk/ukpga/2020/14/schedule/16/enacted seems to indicate that the coronavirus supprot payments are taxable as profits of that business and so am I correct in thinking that the should be included within the accounting period rather than tax year? I know that the SEISS will be charged to NIC but what about the Small Business Rates receipt? Is this a trading receipt (not directly associated with any expenditure) and charged to NIC or should it be "other business income" and charged only to income tax? I believe this is the treatment for the £500 receipt if you have to self-isolate for 2 weeks

Treatment will affect POA calculations for 2019/20 returns as well as 2020/21 accounts/returns

Thanks in advance

 

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By SXGuy
27th Oct 2020 12:57

SEISS is taxed in the 20/21 TR irrespective of accounting year end.

You will need to amend any accounts which have been done already that fall in to that tax year.

LA grants are subject to tax but I'd assume not nic. Those however are taxed in the year the business became eligible rather than the tax year to which is was paid.

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By Paul Crowley
27th Oct 2020 13:07

I would be amazed if anything at all is not just taxed as income, or contra the payment.
By that I mean NI if self-employed

Isolation grants are nothing to do with this

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By Cowders72
27th Oct 2020 15:01

Do you have anything that states that SEISS is taxed in tax year rather than accounts year? Legislation seems to state it is a receipt of the business not the person so I am leaning towards accounts year

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By Paul Crowley
27th Oct 2020 15:27

Accounts really do not matter
Tax liability IS ye 2021,

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By lionofludesch
27th Oct 2020 15:28

Cowders72 wrote:

Do you have anything that states that SEISS is taxed in tax year rather than accounts year? Legislation seems to state it is a receipt of the business not the person so I am leaning towards accounts year

Merely search this forum.

There are close on a hundred threads on this already. All of which contradict your own thoughts.

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By Geoff56
27th Oct 2020 13:03

I asked a question relevant to this, back in July, which might help.

https://www.accountingweb.co.uk/any-answers/timing-of-taxability-of-smal...

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By Paul Crowley
27th Oct 2020 13:09

Numerous threads and a get Aweb live with Rebecca and Helen

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By Geoff56
27th Oct 2020 13:12

I am sure that the LA grants, as part of the trading results, will come into the reckoning for class 4 NICs.

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