Taxable income

LouiseR

Does anyone know if the DWP recruitment subsidy is taxable income for corporation tax purposes?

HMRC are constantly engage at the moment!

Thanks

Louise

T.C.

Don't know the answer, but just thought I would mention the priority telephone lines - didn't know if you are using one of those - http://www.hmrc.gov.uk/workingtogether/priority-lines-list.htm. Good luck!

LouiseR

Thanks, I've just got through and they don't know! It's being referred to an inspector. I'll post once I've found out.

Dean

Hi Louise

I think there are different types of subsidy at the moment. One is for long term JSA which is £60 per week, the other is around £1000 paid part on starting the job and part if the employee is still in employment with the same employer for (I think) six months.

From an accounting persective I would not treat this as "other income" but as a reduction in wages because it isn't "income" it is a wages subsidy.

To answer your question directly; yes it's taxable. Think of it this way, if you had an employee for twelve months and paid them £1,000 the company's net cost would be zero. The company will have been more productive and hopefully produced more sales - hence more tax payable.

Dean

You might also like to check the "devil in the detail" also. If there are any 'terms' you may have to account for it under "government grants" - however, I suspect not.

LouiseR

Dean wrote: »

To answer your question directly; yes it's taxable. Think of it this way, if you had an employee for twelve months and paid them £1,000 the company's net cost would be zero. The company will have been more productive and hopefully produced more sales - hence more tax payable.

Thanks Dean, yes that was my conclusion after speaking with a not so helpful HMRC inspector!