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

We are inviting views on the technical effectiveness of this measure, which ensures that grants within the legislation are subject to tax. These grants are treated as income where the business is within the scope of either Income Tax or Corporation Tax.

The measure provides for a delegated power to make provision about its application to a particular grant scheme.

It will also give HM Revenue and Customs (HMRC) powers to recover payments to which recipients were not entitled to under the Self-Employment Income Support Scheme or the Coronavirus Job Retention Scheme payment or where a Coronavirus Job Retention Scheme payment has not been used to pay employees, make pensions contributions, pay PAYE or National Insurance contributions. HMRC will be able to do this by raising Income Tax assessments or requiring taxpayers to submit a Self Assessment tax return.

HMRC will also be able to charge a penalty in cases of deliberate non-compliance. Further provisions may be included in the final new clause and schedule when tabled.

The measure does not legislate for the operation of any of the COVID-19 support schemes.

On this page you can read:

• the draft clause
• the draft explanatory note
• a draft tax information and impact note