Commentary

B2.210B Recovery of coronavirus (COVID-19) support payments where support schemes incorrectly used

Business tax
Business tax | Commentary

B2.210B Recovery of coronavirus (COVID-19) support payments where support schemes incorrectly used

Business tax | Commentary

B2.210B Recovery of coronavirus (COVID-19) support payments where support schemes incorrectly used

HMRC has powers to recover coronavirus support payments (CSPs) through the tax system where the support schemes have not been used as intended. HMRC have issued a factsheet about the assessment and penalties which may be applicable, see Penalties for not telling HMRC about Self-Employment Income Support Scheme grant overpayments — CC/FS47. See also Penalties for not telling HMRC about coronavirus (COVID-19) support scheme overpayments — CC/FS11a on the penalties that HMRC might charge where an income tax charge has not been notified regarding overpayments made under certain coronavirus support payments.

Charge to income tax where person not entitled to payment

An additional charge to income tax arises for CSPs to which the recipient was not entitled. The charge is to income tax even if the recipient is a company chargeable to corporation tax1. It is notable that this income tax charge does not encompass the coronavirus business support grant schemes, the coronavirus statutory sick pay rebate scheme or a payment under the test and trace support payment schemes, ie at present it applies only to CSPs received under the CJRS or the SEISS2.

The amount of income tax is equal to the amount of the CSP that the person was not entitled to and has not been repaid, ie it is a 100% tax charge, not a tax rate applied to the amount received. However, if the income tax charge arises under this provision, the person will not

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