Readers’ forum: Corona support

My client qualified for the small business support grant of £10 000 which she was delighted to receive on 2 April. Her business accounting year end is 5 April.

I have heard a suggestion that as an unconditional grant with no possibility of repayment it should be included as income in 2019-20 in which case it will be taxed at 40% (plus 2% National Insurance contributions). In my view it is intended to support the business during the lockdown period so it should go in 2020-21 when it may well contribute to a much reduced profit.

I appreciate that if my client ends up with a loss in 2020-21 it will not matter because it will be possible to carry it back against the previous year. However if the rest of the results are (say) £60 000 and break-even putting...