Measure
Legislation will be introduced in Finance Act 2021 to ensure that businesses making a repayment of COVID-19 support which falls outside the definition of a “Coronavirus Support Payment” can claim a deduction for income or corporation tax purposes equivalent to the amount of the repayment.
The measure allows a tax deduction to be taken where a businesses had a liability which would have been deductible for income or corporation tax purposes, had it not been for the receipt of COVID-19 support. The deduction will be available in the same period as the original expense, to provide neutrality.
Businesses which have made a repayment of certain support payments, such as business rates relief will be able to claim a deduction for income or corporation tax purposes equal to the amount of the repayment.
The measure will be introduced by Finance Act 2021 and will have retrospective effect.
The measure will provide welcome clarity for businesses who have made voluntary repayments of support payments and will enable them to obtain tax relief in the same period as the original cost (e.g. business rates) would have fallen due.