Muras Matters: Taxation of Coronavirus Support Payments


When the Government announced their various support packages for businesses and taxpayers affected by the coronavirus pandemic it was stated that grants made available were intended to represent taxable income for those businesses and taxpayers.

HM Revenue & Customs (HMRC) have now published legislation and supporting notes formally confirming that these grants will represent taxable income for those who receive them. The legislation has also outlined HMRC’s powers to recover payments from those who were not entitled to claim them.


Legislation recently published by HMRC has confirmed that particular grants designed to help businesses, employers, the self-employed and individual partners of partnerships affected by the coronavirus crisis will be treated as taxable income for those parties. This includes payments made under the coronavirus job retention scheme (CJRS), the self-employment income support scheme (SEISS) and other business-supporting grant schemes.

It has also been confirmed that HMRC has the power to recover payments to which claimants were not entitled under the SEISS or the CJRS or when an employer has failed to use a grant to pay employees, make pension contributions, or pay PAYE or National Insurance contributions. HMRC will be able to do this by raising tax assessments or requiring taxpayers to submit a self-assessment tax return. It is important to note that when asking HMRC for a time to pay arrangement in respect of PAYE they will expect any element of PAYE and NIC reclaimed under the CJRS to be paid over on time. It will not be possible therefore to obtain a time to pay agreement for that element of PAYE/NIC.

HMRC will charge penalties in cases of deliberate non-compliance and there have already been reports in the press of arrests being made for alleged fraudulent claims by taxpayers under the CJRS showing that HMRC will be following up on claims and taking necessary action were appropriate.

Our updated working arrangement – We remain ‘Open for business’

Our staff have returned to office based working on a rota basis, each attending two days a week, whilst continuing to work from home at other times. They can still be contacted in the usual way either via email or by calling the office number where reception will divert your call to the appropriate staff member.

If you would like more information or if you require our assistance regarding coronavirus support payments please speak to your usual contact at the firm.

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