I have a client who has a FHL that qualified for, and received, a local authority grant of £10,000 in 2020/21. I can't think why it shouldn't be taxable, just like the SEISS grants. Anyone disagree?
Also, where does it go on the tax return? Other income?
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The question is simple - why did he need to apply for the grant?
If it was a FHL he didn't need to apply. Sounds like he was registered for business rates so it would have been sent automatically.
Let me rephrase then. Why did he need the cash, and if he didn’t need it is he going to hand it back? (The second part is rhetorical.)
Only if you want to. The point that I was failing to make was that if you consider why your client may have wanted or needed the grant that might lead you to the answer as to whether or not it is taxable.
Let me rephrase then. Why did he need the cash, and if he didn’t need it is he going to hand it back? (The second part is rhetorical.)
He doesn't have to hand it back. It wasn't conditional on being affected by covid.
You're in a blind ginnel here.
It's taxable. Stick it in the other income box.
Did you miss the bit in brackets?
Although, if such grants were handed out willy-nilly, unsolicited, with no thought as to their need, all the more reason to hand back money that isn’t needed so that it can be re-distributed to more deserving causes.
But we’ve long learned to forget about taxpayers having morals.
This https://www.gov.uk/government/publications/self-assessment-uk-property-s... might answer your enquiry more succinctly. The extract refers to;-
Coronavirus support scheme payments
You must include amounts of taxable coronavirus support scheme payments that you received, subject to further guidance in these notes. These include the following:
• Coronavirus Job Retention Scheme (CJRS) • any other applicable HMRC coronavirus support scheme • payments that you were entitled to receive from local authorities or devolved administrations
For more information about coronavirus support schemes, go to www.gov.uk/coronavirus/business-support
The notes to SA105 are your friend here: https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
Box 5 Income
Put the total amount of income from all your FHL (including income from services you provide to tenants) in box 5.
Coronavirus support scheme payments are taxable and include payments from the Coronavirus Job Retention Scheme (CJRS), any other applicable HMRC coronavirus support scheme and payments you were entitled to receive from local authorities or devolved administrators.
If you received coronavirus support scheme payments, include in box 5 the amount you received.