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The government has opened a new consultation ‘Taxation of Coronavirus (COVID-19) support payments’ on draft legislation which includes measures to tax the grants available, recover payments from businesses not entitled to them and penalise deliberate non-compliance.  

Legislation will be incorporated into Finance Act 2020 and apply to the following grants, collectively defined as ‘COVID-19 support scheme payments’:

The legislation confirms that all COVID-19 support scheme payments are taxable under either Income Tax or Corporation Tax as appropriate.

In respect of SEISS and CJRS, the draft legislation gives HMRC the power to:

The consultation closed in June 2020.

Links to our guides

COVID-19: Coronavirus Job Retention Scheme
Coronavirus Job Retention Scheme: a cash grant that is designed to allow employers to retain staff who would otherwise be laid off.

COVID-19: Self-Employment Income Support Scheme (SEISS)
COVID-19: Support for the self-employed during the coronavirus crisis. HMRC's claims portal is now open. 

COVID-19: Grant funding for business
A number of cash grants to support businesses during the COVID-19 crisis are available.

COVID-19: Business Rates
The Expanded Retail Discount scheme: a business rate holiday applies to retail, hospitality and leisure businesses in England for the 2020/21 tax year.

COVID-19: Northern Ireland
A number of measures have been announced by the Northern Ireland government to support individuals and businesses.

COVID-19: Wales

COVID-19: Scotland

External link

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