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Is my Grant Capital or Revenue?
A grant is an amount of money given to an individual or business for a specific project or purpose.
You can apply for a grant from the government, the European Union, local councils and charities.
Advantages include:
- you won’t have to pay a grant back or pay interest on it
- you won’t lose any control over your business
Financial assistance in the form of grants is subject to the normal taxation rules, as supplemented by S105 Income Tax (Trading and Other Income) Act 2005 and S102 Corporation Tax Act 2009 (see BIM40465). Under normal rules the tax treatment of grants will depend on whether they are capital or revenue.
Revenue grants
Grants which meet revenue expenditure, such as interest payable, are normally trading receipts.
See also Smart v Lincolnshire Sugar Co. Ltd [1937] 20TC643 and Burman v Thorn Domestic Appliances (Electrical) Ltd [1981] 55TC493.
Capital grants
Grants which meet capital expenditure are normally not trading receipts.
Grants that may be capital in nature include those paid to acquire capital assets or to facilitate the cessation of a trade or part of a trade.
See The Seaham Harbour Dock Co. v Crook [1931] 16TC333).
A capital grant reduces any qualifying capital expenditure for capital allowance purposes, see CA14100.
See BIM40451 for more details
The Accounting Rules are set out in section 24 of FRS102, neatly explained by Steve Collings in his blog, click here to read it
steve@bicknells.net
Growth Vouchers – last few days!
Apply before 31st March to get up to £2,000 from the Government for professional business advice
• Growth Vouchers are a grant from the Government to help businesses like yours get business advice from accredited advisers.
• The voucher match-funds your investment in professional advice for your business so you could get a grant of up to £2,000 towards the cost of the advice.
You can use the voucher to get advice on:
• Finance – and how to manage your cash flow better
• Recruiting staff – how to develop their skills
• Improving management and leadership skills
• Marketing – attracting and keeping customers
• Technology – and how your business can make the most of it.
https://www.gov.uk/apply-growth-vouchers
https://marketplace.enterprisenation.com/
steve@bicknells.net
Government help to get new businesses started
The New Enterprise Allowance can provide money and support to help people start their own business if they get certain benefits and have a business idea that could work.
The scheme has resulted in:
- around 460 new businesses being set up each week – around 53,000 in total
- 12,360 businesses being started by people aged 50 or over
- 10,040 disabled people becoming their own boss
- 3,920 started by young people
People who don’t qualify for the scheme may be able to get other help with setting up a business.
Business Mentors have a key role to play
The New Enterprise Allowance is available to:
- people over 18 who are claiming Jobseeker’s Allowance
- lone parents on Income Support
- people on Employment and Support Allowance in the work-related activity group
People on the scheme get expert help and advice from a business mentor who will help them to develop their business idea and write a business plan. If the business plan is approved, they are eligible for financial support payable through a weekly allowance over 26 weeks up to a total of £1,274.
There are also Start Up Loans…
A government funded scheme to provide advice, business loans and mentoring to startup businesses
steve@bicknells.net
Business Accountant 