Does turnover threshold for Microentity include furlough?

[maturin23]

Hi all

Like a lot of companies we've had reduced business levels as a result of Covid.

I normally use an accountant to submit our returns as our turnover has been well over £632k for the last few years.
2020 turnover figure has dropped just below that. However if we include furlough income we are above that figure.

As our accounts are very simple and I've already put the calculations together I'm happy to self-submit via CT600 and save a few quid.
I've spent over 90 minutes on hold with HMRC, an agent did some research then said she didn't know, so I'm back on hold again.

Does anyone know for sure?

[skwdenyer]

maturin23 said:

Hi all

Like a lot of companies we've had reduced business levels as a result of Covid.

I normally use an accountant to submit our returns as our turnover has been well over £632k for the last few years.
2020 turnover figure has dropped just below that. However if we include furlough income we are above that figure.

As our accounts are very simple and I've already put the calculations together I'm happy to self-submit via CT600 and save a few quid.
I've spent over 90 minutes on hold with HMRC, an agent did some research then said she didn't know, so I'm back on hold again.

Does anyone know for sure?

My understanding is that under UK GAAP (FRS: 101, 102 and 105) this should be recorded as other income received, not turnover.

This may help: https://mooreks.co.uk/insights/accounting-for-furl...

and then in terms of whether "other income" counts in the limits, this may be useful to you:

https://library.croneri.co.uk/cch_uk/tecm/2-3

[wattsm666]

Furlough is not turnover. Turnover should be income
from the trading activities.

[maturin23]

The correct answer is that for the sole purpose of CT600 submission as a Microentity it is included in the 'turnover' figure.