The Corporation Tax treatment of Coronavirus Support Payments

HMRC have confirmed the treatment of Covid support payments for Charities and Community Amateur Sports Clubs (CASCs).


Charities are given a statutory exemption from Corporation Tax on the profits of small-scale trading. The annual turnover limit is currently:

  • £8,000; or
  • If the charity’s total income is greater than £8,000, 25% of its total incoming resources up to a maximum of £80,000.

HMRC have updated their guidance to confirm that receipts from the Coronavirus Job Retention Scheme payments will not count towards the small trading exemption threshold.


A small charity raises funds by selling items such as pens, pencils, mugs etc. Its profits from this activity ordinarily qualify for the small trading exemption and are not taxed. The charity furloughs some staff involved in the sale of goods but is able to continue to make some profits via online sales. The receipt of the CJRS grant does not count towards the incoming resources threshold and if other conditions are satisfied it may continue
to qualify for the small trading exemption on its trading profits.

Community Amateur Sports Clubs (CASCs)

Registered CASCs are entitled to exemptions from Corporation Tax on activities, including:

  • Non-member trading income if its turnover from that trade is less than £50,000 a year.
  • Property income if its total income from property is less than £30,000 a year.

HMRC’s updated guidance states that employment related grants do not count towards these limits.


A Community Amateur Sports Club furloughs its staff and receives CJRS income of £30,000. As CJRS is an employment-related scheme, that receipt of £30,000 does not count as a receipt for the purposes of Condition A in section 662(2) and 663(2) Corporation Tax Act (CTA) 2010. If all other conditions are satisfied, the CASC will qualify for exemption from corporation tax for its UK trading and/or property income. However, the guidance also states that non-employment related grants do count towards these limits, so may be taxable.

Further information on this item and many more articles of interest are now available in our Not for Profit update – March 2021. Read it here:

Read our Not for Profit Update - March 2021

Visit our dedicated Coronavirus Hub for the latest updates. For further information or advice for your organisation, please get in touch with a member of our Charity and Not for Profit team.