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  • Tax on a Grant for Next Tax Year but Received This Tax Year

    I am due to receive a grant at the end of this tax year (2022-23) that serves two purposes; half of it is to pay me a salary (ideally in tax year 2023-24) and the remaining part is for direct costs that will be accrued over the tax year (2023-24). How do HMRC regard this? Do they view the whole amount as taxable income for 2022-23? Do I have to pay tax on the portion that is ring-fenced as direct costs and then claim it back as an allowance in my tax return for 2023-24?