Finance Act 2021

Coronavirus support payments etc

31 Covid-19 support scheme: working households receiving tax credits

(1) This section applies to a payment which—

(a) is made by Her Majesty’s Revenue and Customs in the exercise of a function which they have as a result of a direction given by the Treasury under section 76 of the Coronavirus Act 2020, and

(b) is made to a person by reason of the person’s receipt of any tax credit specified in the direction on a date so specified.

(2) No liability to income tax arises in respect of a payment to which this section applies.

(3) But subsection (2) does not prevent the application of paragraph 8 of Schedule 16 to FA 2020 (charge to income tax where person not entitled to coronavirus support payment) in relation to a payment to which this section applies.

32 Self-employment income support scheme

(1) In section 106 of FA 2020 (taxation of coronavirus support payments), in subsection (3)—

(a) after “provision about” insert “(including provision modifying)”;

(b) for “(2)(c)” substitute “(2)(b)”.

(2) In paragraph 3(3) of Schedule 16 to FA 2020 (self-employment income support scheme payments to be treated as receipts of the tax year 2020-21), for “2020-21” substitute “in which the payment was received”.

(3) In paragraph 8 of that Schedule (charge if person not entitled to coronavirus support payment)—

(a) in sub-paragraph (3)—

(i) in the words before paragraph (a), after “scheme” insert “or the self-employment income support scheme”;

(ii) in paragraph (b), before “because” insert “in the case of a payment made under the coronavirus job retention scheme,”;

(b) in sub-paragraph (4)(a), after “scheme” insert “or the self-employment income support scheme”.

(4) The amendments made by subsections (2) and (3) have effect in relation to coronavirus support payments received on or after 6 April 2021.

(5) In this section “coronavirus support payment” has the meaning it has in Schedule 16 to FA 2020 (see section 106(2) and (5) of that Act).

33 Deduction where business rates etc repaid

(1) This section applies if—

(a) a person (“A”) carrying on a business would, but for a coronavirus support arrangement, have incurred a liability to pay a charge to a public authority,

(b) an expense incurred in discharging that liability would have been deductible in calculating the profits of the business for the purposes of income tax or corporation tax, and

(c) an amount in respect of some or all of that liability is paid to that or any other public authority.

(2) In calculating the profits of the business of A for those purposes—

(a) a deduction is allowed for the amount paid, and

(b) that amount is treated as if it had been paid in the period in which the charge would have been due and payable.

(3) No deduction is otherwise allowed for the amount paid in calculating the profits of the business of any person for those purposes (including where the amount was paid by a person other than A).

(4) For the purposes of this section “coronavirus support arrangement” means an arrangement where—

(a) a liability in respect of non-domestic rates, or

(b) such other liability in respect of a charge payable to a public authority as may be specified in regulations made by the Treasury,

is waived, or reduced, for purposes connected with the provision of support to businesses in connection with coronavirus.

(5) Regulations under subsection (4)(b) may have retrospective effect.

(6) In this section “coronavirus” has the meaning it has in the Coronavirus Act 2020 (see section 1 of that Act).

(7) This section has effect in relation to payments whether made before or after the passing of this Act.