Updated: Nov 8, 2021
HMRC are contacting self-employed workers with important information about the Self-Employment Income Support Scheme (SEISS) grants they received, and how to report them correctly on their upcoming tax return.
Officials were keen to stress SEISS grants are subject to Income Tax and National Insurance contributions (NICs), and need to be included on the next tax return.
Workers who received one or more SEISS grants must report their SEISS grants in the following way:
Grants received on or before 5 April 2021 need to be included in the 2020-21 Self Assessment tax return, due by 31 January 2022. For most people, this will be the first, second and third SEISS grants.
Grants received on or after 6 April 2021 need to be included in the 2021-22 Self Assessment tax return, due to be submitted by 31 October 2022 if a paper return, or 31 January 2023 if an online return. For most people, this will be the fourth and fifth SEISS grants only.
In addition to SEISS, UK Government coronavirus grants and support payments are taxable, as are most payments from local authorities, the Scottish Government, Welsh Government and Northern Ireland Assembly. Taxable payments received must be included on the worker’s tax return. To find out which grants or support payments need to be reported, HMRC are urging self-employed workers go to gov.uk/report-covid-payments.
How to report SEISS grants on your tax return
Self-employed workers that use an agent or accountant to submit the return on their behalf, are urged to notify them the value of the grant(s) received, so they can include accurate information on the appropriate return. HMRC officials have also reminded individuals to not share their Government Gateway login details with anyone else, including their agent or accountant.
If the individual completes their Self Assessment tax return themself, there is a specific box on the self-employment page to tell HMRC about SEISS grants. Workers must not report their SEISS grants anywhere else on their tax return, for example in the 'any other income' box or as part of their turnover figure, as this may result in them being taxed twice.
If the worker is a partner and their SEISS grants were treated as partnership income that was included in the partnership accounts, they do not need to include the SEISS grants on the partnership page of their personal tax return.
Guidance on how to complete the return, including which boxes to complete to accurately report the grants and support payments, can be found in the 'notes' pages for each return type.
The deadline for submitting a 2020-21 Self Assessment tax return is 31 January 2022 if submitted online.
The deadline for submitting the 2021-22 Self Assessment tax return is:
31 October 2022 if submitted on paper
31 January 2023 if submitted online.
If a tax return is not submitted by the applicable deadline date, there may be charged a penalty.
If you have already submitted your 2020-21 tax return
HMRC are checking tax returns to make sure that SEISS grants have been included correctly. Those that have already completed their 2020-21 return and did not report their SEISS grants in the way HMRC expected, will be contacted by HMRC about any changes that need to be made.
If HMRC amend a return, it’s important that the worker checks the amendment and the SA302 tax calculation sent to the individual , to see what has changed. Workers are warned there is a risk they will pay tax and NICs twice on the same SEISS grants, if individuals do not check the changes
Tell HMRC about changes to your entitlement for SEISS grants
HMRC have said that they understand that mistakes can happen. With that in mind HMRC have tried to make it as easy as possible to pay back any amounts of SEISS grants individuals have received that they were not entitled to.
You must tell HMRC if the worker:
made a claim in error when they were not eligible for a grant
received more than HMRC said they were entitled to.
For more information on what to do in this scenario, HMRC are directing workers to gov.uk/hmrc/repay-seiss.
Other SEISS impacts to be aware of
SEISS grants are part of taxable income – which means SEISS grants could affect other things, like the amount of:
Universal Credit individuals are entitled to
Student Loan that must be repaid.