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Local Authority Flood Grant

  • Member PM.Dip
  • Practice Licence
  • 24 posts
  • # 115188

Hello fellow ICBers,

A client has received a grant from their local council following flooding of their business premises. Would this be classed as taxable income? They have subsequently refurbished and the premises and added measures to protect the stock.

I hope this is an easy question to answer!

Many thanks,

Sarah

  • Member
  • Practice Licence
  • 39 posts
  • # 115228

Ooer, no I don't think it is an easy one to answer, sorry. Its a good question though.

Grants can be- Capital or revenue.

Yours looks to be capital.

If its capital how would the grant be released to the P&L? Are Capital allowances being claimed against the capital expenditure items? AIA perhaps?

The grant could affect this.

 

Sorry can't help much but thought a reply might help so you know its not just being ignored

 

 

 

 

  • Member PM.Dip
  • Practice Licence
  • 24 posts
  • # 115248

Hi AweltedSoul

Thanks for your reply. Yes it is capital expenditure and is taxable. I rang HMRC for guidance and they pointed me to the folowing for guidance:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim40100

Have bookmarked it for future reference.

Best wishes,

Sarah

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