Have you claimed from the SEISS scheme? Make sure to record it on your next tax return
Beneficiaries of grants from the Self-Employment Income Support Scheme (SEISS) are being reminded that they must include income from the scheme on their next tax returns to HM Revenue & Customs (HMRC), as it is subject to Income Tax and National Insurance.
This scheme was set up by the Government to provide support during the Coronavirus pandemic for those who are self-employed, either as a sole trader or a partner in a partnership.
Already, thousands of taxpayers have benefitted from the first four rounds of SEISS grants, with a final round still due to take place shortly.
The fifth and final SEISS grant will cover lost earnings from May 2021 onwards, and self-employed individuals and partners can claim it from late July 2021.
It covers 80 per cent of average self-employed profits if your turnover has fallen by more than 30 per cent; those who haven’t been as badly affected can still get a 30 per cent SEISS grant. There are qualifying criteria to meet and more information will be available in early July.
You don’t need to repay a correctly claimed SEISS grant, – it is not a loan. However, SEISS grant awards are subject to Income Tax and Class 4 National Insurance contributions and your accountant can advise on this.
The SEISS grants are taxable in the tax year in which they are received. So, the first three SEISS grants are taxable in the 2020/21 tax year and they should be reported in full in your 2020/21 Self-Assessment tax return.
If you’re self-employed and your sole trader business receives a SEISS grant in the fourth or fifth rounds, they’re taxable in the 2021/22 tax year and should be reported on your 2021/22 Self-Assessment return.
To make it easier for self-employed people to enter money received from SEISS grants, HMRC will include a box on the 2020/21 and 2021/22 Self-Assessment tax return forms.
If you would like to know more about the personal tax rules surrounding the SEISS, please contact your Seymour Taylor representative today or email firstname.lastname@example.org or call 01494552100.
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at the time of publishing 6 July 2021.