This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

At a glance

  • Section 106 and Schedule 16 of Finance Act 2020 lay down the basis of taxation for Coronavirus support payments which include:
    • The Coronavirus Job Retention Scheme (CJRS).
    • The Self-Employment Income Support Scheme (SEISS).
    • Any other scheme under section 76 Coronavirus Act 2020 (for example, the Eat Out to Help Out scheme).
    • The Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS).
    • Any Coronavirus Business Support Grant Scheme.
    • Any other scheme which may be included under a Regulation made by the Treasury.
    • Public authority grants such as (but not limited to): the Small Business Grant Fund, the Retail Hospitality and Leisure Grant Fund and the Local Authority Discretionary Grant Fund.
  • All Coronavirus support payments are revenue in nature.
  • Where Coronavirus support payments relate to business they form profits of that business for Income Tax or Corporation Tax, as relevant.
  • ‘Business’ for these purposes includes:
    • Trades, professions and vocations.
    • UK or overseas Property businesses.
    • Businesses consisting wholly or partly of making investments.

What's new? 

  • Legislation was included in Finance Act 2021 to tax SEISS grants received on or after 6 April 2021 in the year of receipt.
    • The exception is the case of SEISS grants which are partnership income is unchanged.