Covid Restrictions Support Scheme (CRSS)

Payments received by employers :

Payments received under the CRSS are revenue in nature and will be treated as a reduction of otherwise tax – deductible trading expenses for tax purposes.

Similar to the accounting and tax treatment where the restart grant was used to defray revenue related expenditure, wherethe CRSS receipts are used to defray expenditure which is revenue in nature like utility bills or insurance costs then it will be taken into account when calculating the amounts chargeable to income tax or corporation tax.

In essencethe payments are taxable income and for accounting purposes the CRSS receipts will be credited against the expenses incurred thereby leaving the net expense reflected in the accounts which is then allowable as a deduction for income tax or corporation tax purposes.

Therefore the payments received are effectively taxable payments subject to income tax or corporation tax depending on the structure of the entity receiving the payments.

Entities should keep a log of the expenditure which they have discharged from the CRSS receipts which can then be used by the agents to make the appropriate credit entries against the expenditure to arrive at the tax deductible net figures.