Open Consultation: Draft legislation – Taxation of coronavirus (COVID-19) support payments

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The Government are welcoming views on draft legislation to introduce rules on the taxation of coronavirus (COVID-19) business support grants. This consultation closes at 11:45pm on 12 June 2020.

The Government are inviting views on the technical effectiveness of this measure, which ensures that grants within the legislation are subject to tax. These grants are treated as income where the business is within the scope of either Income Tax or Corporation Tax.

The measure provides for a delegated power to make provision about its application to a particular grant scheme.

It will also give HM Revenue and Customs (HMRC) powers to recover payments to which recipients were not entitled to under the Self-Employment Income Support Scheme or the Coronavirus Job Retention Scheme payment or where a Coronavirus Job Retention Scheme payment has not been used to pay employees, make pensions contributions, pay PAYE or National Insurance contributions. 

HMRC will be able to do this by raising Income Tax assessments or requiring taxpayers to submit a Self Assessment tax return.

HMRC will also be able to charge a penalty in cases of deliberate non-compliance. Further provisions may be included in the final new clause and schedule when tabled.

The measure does not legislate for the operation of any of the COVID-19 support schemes.

On this page you can read:

  • the draft clause
  • the draft explanatory note
  • a draft tax information and impact note

Documents include:

Taxation of coronavirus support payments – draft new clause

PDF, 754KB, 12 pages

Taxation of coronavirus support payments – draft explanatory note

PDF, 811KB, 10 pages

Taxation of coronavirus support payments – draft tax information and impact note (TIIN)

PDF, 742KB, 5 pages

For assistance, email:

businessprofits.admin@hmrc.gov.uk

Graham Sheen

Graham Sheen

Graham Sheen is the BWA Secretary, appointed in 2019. Graham has a strong background in logistics and warehousing, and is very well connected within the warehousing and supply chain sectors.

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