Companies: CJRS payments require accruals and cash accounting

HMRC have updated their CT600 guidance to cover the declaration requirements for Coronavirus Job Retention Scheme (CJRS) payments for companies and advised that this will require tracking on both the accruals and cash basis.

CJRS payments accruing in the accounting period will be included in the accounting profit for the period as you would expect under UK GAAP, but a further declaration is required on the CT600 return for payments received, payments the company is entitled to and overpayments already assessed or voluntarily disclosed.

CJRS received

Payments received during the accounting period of the return need to be declared.

The figure included on the return should not include deductions for:

• Amounts disclosed as overpayments.
• Amounts already assessed by HMRC.
• Amounts received and repaid voluntarily.

The figure should be adjusted to add back:

• Overpayments of amounts received in an earlier period that have been offset against CJRS payments received in the current accounting period.

CJRS entitlement

• Payments the company is entitled to for the accounting period need to be declared.  
• Failing to complete the appropriate box will result in the CJRS received being treated as an overpayment.
• The entitlement figure declared should include any amounts received that the company was entitled to which it has voluntarily repaid.

CJRS overpayments already assessed or voluntarily disclosed

Finally, a declaration is required for CJRS payments received in the accounting period which at the time of completing the return:

• Have already been assessed by HMRC irrespective of whether the assessment has been paid.
• Have been disclosed voluntarily to HMRC as CJRS overpayments irrespective of whether the amounts have been paid, or
• Are overpayments which have been offset against subsequent CJRS payments.

The following amounts should not be included here:

• Amounts received that the company was entitled to but which were repaid voluntarily, or
• Overpayments chargeable in the accounting period that are yet to be disclosed or assessed by HMRC when the return is completed.

Useful guides on this topic

COVID-19: Coronavirus Job Retention Scheme (CJRS) to 31 October 2020
Coronavirus Job Retention Scheme (CJRS): a cash grant payable to employers up to 31 March 2021.

COVID-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020
What is CJRS? When does the CJRS apply? How to claim CJRS. How to calculate CJRS claim amounts.

COVID-19: Taxation of Coronavirus support payments
This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

GAAP & FRS: Changes tracker
UK Generally Accepted Accounting Practice (GAAP) changed for accounting periods, beginning on or after 1 January 2015, with the introduction of FRS101 and FRS102.  

External Links

CT600 guide