Record grant funding for hospitality and leisure businesses - UK

How the scheme works

On 21 December 2021 the Government announced additional Coronavirus funding to support businesses in the hospitality and leisure sectors who've been most impacted by the Omicron variant. In England, grants are available to eligible businesses as follows:

• £2,700 for businesses with a rateable value of £15,000 or under
• £4,000 for businesses with a rateable value between £15,000 and £51,000
• £6,000 for businesses with a rateable value of over £51,000

Additional funding is also being made for the devolved administrations to offer additional business support. 

Businesses should visit their local council website to find out how to access this support. You can find out more at GOV.UK

TIP: The Government also announced a reintroduction of the Statutory Sick Pay Rebate Scheme (SSPRS).

Create new nominal codes to record the grant

If you've previously received a Coronavirus Retail, Hospitality and Leisure Grant or a Local Restrictions Support Grant, we recommend you use the same nominal codes you used to record that income. If you didn't receive those earlier grants, we recommend you create the following new nominal codes to record when you make a grant claim and when a grant is received, unless otherwise advised by your accountant. This will help you when reconciling any grant income received.

1. On the navigation bar click Nominal codes then click New/edit.
2. Complete the Nominal Record window as follows:

   N/C	Enter the nominal code number you want to create, for example, 1150.
   Name	Enter the name of the account, for example, Leisure and hospitality grant accrued income

3. Click Save then click Close.
4. Repeat this process to create the second nominal code.

TIP: If not already included, you must add your new nominal codes to your existing chart of accounts. If preferred, you can show coronavirus grants as a separate category on your profit and loss.

Record a grant claimed

You should record each claim you make as a journal entry, to post a debit for accrued income on the balance sheet under Debtors, and a credit on the profit and loss under Other Sales.

For the purposes of this section we'll use the following example:

• The company makes a claim for £6,000 on 10 January 2022.
• No grant has yet been received.
• In this example, we're using the non-vatable tax code, T9.*

1. On the navigation bar click Nominal codes then click Journal entry.
2. In Reference, enter a reference, then in Posting Date enter the date of the claim.
3. Enter the following information to record the accrued income:
   

   N/C	Name	Details	T/C	Debit	Credit
   1150	Leisure and hospitality grant accrued income	Leisure and hospitality grant claim	T9	6000.00
   4950	Leisure and hospitality grant received	Leisure and hospitality grant claim	T9		6000.00

4. Click Save then click Close.

Process a grant received

You should record the grant you receive as a bank receipt to the Leisure and hospitality grant accrued income nominal code. This increases your bank account balance and reduces the accrued income balance.

For the purpose of this article we'll use the following example:

• The company receives a grant of £6,000 on 20 January 2022.
• The grant is received into the company current account, nominal code 1200.
• In this example, we're using the non-vatable tax code, T9.*

1. Click Bank accounts, click Receipts then click Bank receipt.
2. Complete the Bank receipts window as follows:
   

   Bank	Date	N/C	Details	Net	T/C	Tax
   1200	20/01/2021	4950	Leisure and hospitality grant received	6000.00	T9	0.00

3. Click Save then click Close.

NOTE: * 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 your accountant to understand if any grant received should be treated as vatable or non-vatable income.  You can find further details on what income is vatable in the HMRC manual. Grant income is likely to be considered income for income or corporation tax purposes.