Grant income

New limited company received a startup grant of £10,000. The company has not traded to date, no sales, no turnover. A few expenses have been incurred, mainly advertising and marketing. The grant is not repayable, and has not been received in exchange for services or goods. The grant is designed to get the new company off the ground. Have read BIM 4055 and consider the grant is classed as a Revenue grant. The only condition of the grant is that it is not to be used for the directors wage or personal expenditure. It is to be used wholly on the business concept to bring the business to life. Within BIM 4055 - " A grant or subsidy may also be received in relation to non-trading activities. In this situation, the grant or subsidy is not taxable as trading income." I am of the opinion that the grant income is recorded as being received in the bank, and is allocated to other income. I want to confirm if the grant is taxable income and therefore subject to corporation tax.

Hi,
 

Thank you for your query. Corporation Tax is self assessed therefore we cannot comment on whether the income received is taxable or not. Further information can be found in BIM40450  , if you require further advice on this matter, please seek professional help through a financial advisor or accountant . Thank you .