How to treat Covid Grant Income in your accounts
I have been asked more than once how you should treat grants from the Government or Local Councils in respect of Grant Income relating to Covid.
First off, ensure that these are Grants and not loans - Loans are repayable and should be set up as Liabilities on the balance sheet, but Grants are Income and will show on the Profit and Loss report.
To set up a Covid Grant Income account, go to Settings > Chart of Accounts> New
Select Account Type> Other Income and detail type >other Miscellaneous Income >
give a name and description and select N as the default VAT Code
These grants will then appear at the bottom of your Profit and Loss report, I would suggest separte accounts for different types of grants , i.e CVJR scheme grants and other Covid Grants .
All of these are of course taxable income so you are not getting quite what you thought you were from the Government! but thats another story.
I'm a Accountant that has dealt with many SME's ( Small and Medium sized Enterprises) over the years, in all aspects of Accounting, Business advice etc.