HMRC clarifies Covid-19 overpayment notification process

HMRC is contacting companies directly about their company tax returns reminding them to declare overpayments from the Coronavirus Job Retention Scheme (CJRS) or the Eat out to Help Out scheme

At the same time HMRC has issued guidance to agents and accountants on declaring Covid-19 support scheme overpayments on company tax returns, informing them that any returns completed before April with overpayments will have to be resubmitted after the covid-19 elements were added to tax return forms.

If a client received a grant from the job retention scheme, then they need to complete the boxes 471-473 during the accounting period covered on the client’s company tax return (CT600).

If the company needs to declare overpayments for the eat out to help out campaign, then box 474 needs to be completed. Agents must also include the grant as taxable income when profits for the company are being calculated
HMRC reminds agents that these boxes were added to the online CT600 on 6 April 2021 and that if any agents have clients who filed their company tax returns before 6 April 2021, then this would have not been available to them.
HMRC states that if these clients have an overpayment to report then they will need to resubmit their return and make sure they include the figures. The tax authority also says that company tax returns that do not include the correct boxes then the return needs to be resubmitted as the overpayments need to be reported and repaid.

If all Covid-19 support overpayments are already repaid or have already been assessed before the tax return is filed and there is no Covid-19 support schemes overpayment due HMRC clarifies that nothing needs to be done to the company tax return.

Box 526 represents the overall figure of the Covid-19 support schemes that are now due. If the amount self-assessed in box 526 remains the same, the amounts entered in boxes 471-474 do not have to be changed.  

HMRC confirms that if the amount self-assessed in box 526 is higher or lower, then the tax return needs to be amended.

HMRC will issue tax charges for any overpayment due, and the tax authority reminds agents that if their client has received a charge following the submission of an incorrect CT600 return using the previous guidance, then they should tell HMRC and amend the return for the charge to be amended.

This information was released in HMRC’s Agent Update: issue 89 which contains the latest guidance and information for tax agents and advisers.

This issue also includes information on the health and social care levy, employer’s liabilities and payments for PAYE, and updates to HMRC appeals processes.

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