contactnew

Taxation of grants

Source: HM Revenue & Customs | | 09/09/2020

A wide variety of grants or subsidies are available to businesses and can be received in addition to the ordinary business income. It is important to identify these and to establish whether they are capital or revenue in nature so that they are dealt with correctly for tax purposes.

Amounts received towards revenue expenditure, such as staff costs, are normally trading receipts and should be included as income or netted off against the relevant expense. Funding which meets capital expenditure is normally treated as a capital receipt. Grants that may be capital in nature include those paid to acquire capital assets, machinery or to facilitate the cessation of a trade or part of a trade.

Some grants may not be for a specific purpose. These are termed undifferentiated receipts. An undifferentiated receipt should be regarded as revenue; however, there is an exception for specific grants paid by Highlands and Islands Enterprise.



 

Latest News

Venues required to record contact details
24/09/2020 - More...
It has become a requirement for premises and venues across England to have a system in place to record contact details

Changes to duty free shopping
24/09/2020 - More...
The government has published the new rules for duty free and tax free shopping that will come into effect from 1 January

Claiming tax relief for work related expenses
24/09/2020 - More...
Employees who need to buy equipment to use as part of their employment may be able to claim tax relief based on the cost

Search News


Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login

» Cookie Policy

» Privacy Policy

Social Media

twit-new