Tips

Accounts – Process a grant received

There are new grant schemes available across the UK to support small business during the coronavirus outbreak.

Process a grant received

Create a small business grant nominal code

In Sage 50cloud Accounts we recommend that you create a new nominal code within the Other income area of your Profit and Loss Account for the Small Business Grant received.  It is recommended that you use nominal code 4920, or the next available code, unless advised otherwise by your accountant.  This will help you when you when reconciling any grant income received.

  1. On the left hand side of the screen click Nominal Codes the click New/edit at the top of the screen.
  2. Complete the Nominal Record window as follows:

N/C       Enter the nominal code you want to create eg 4950.

Name   Enter the name of the account eg Small Business Grant.

  1. Click Save then click Close.

If not already included, you must add your new nominal code to your existing Chart of Accounts.  If preferred you can show coronavirus grants as a separate category on your Profit and Loss account.

Post the grant received into your bank account

For the purpose of this article we will use the following example:

  • The company receives a grant of £10,000 on 20th April 2020.
  • The grant is goes into the company current account, nominal code 1200.
  • In this example, we’re using the non-vatable tax code, T9.*
  1. Click Bank accounts, then click Bank receipts.
  2. Complete the Bank receipts window as follows:
Bank Date N/C Details Net T/C Tax
1200 10/04/2020 4950 Small Business Grant received 10000.00 T9 0.00
  1. Click Save then click Close.

* For VAT registered businesses, income is vatable if it’s within the normal scope of a business or linked to a supply.  Coronavirus related grants are one-off events unrelated to any supply of goods or services.  Whilst it’s unlikely that any grant income will attract a VAT liability, you should seek specific advice from you accountant.  Grant income is likely to be considered income for corporation and income tax purposes.

If you would like help setting up new nominal codes, including nominal codes in your Chart of Accounts, entering grant income etc. or need any other help etc or would like a quote or to purchase an upgrade please contact us

 

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