HMRC issues warning on Self Assessment returns – SEISS grants are subject to tax and NI

Martin Lewis outlines details on the fifth SEISS grant

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HMRC has urged self-employed workers to remember their SEISS grants are subject to tax and National Insurance contributions. This will need to be addressed when completing a Self Assessment tax return.

HMRC issued the following warning: “Filing your 20/21 Self Assessment tax return?

“Remember: Self-Employment Income Support Scheme grants are taxable and subject to NICs.

“Grants received on or before April 5, 2021 need to go on your 20/21 return.

“There’s a seperate box for them.”

Self Assessment tax returns, which are usually completed by self-employed workers, are due in various stages throughout the year.

Currently, paper based tax returns must be completed by midnight October 31, 2021.

Online returns and any final payments must be made by January 31, 2022.

However, people do not have to wait until January to file their returns and the HMRC encourages early completions to avoid rushed decisions.

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If a person has claimed SEISS, or received furlough payments, they’ll need to include details of all the taxable coronavirus support scheme payments they received during the 2020 to 2021 tax year.

Self-employed workers, or those in a partnership, will need to declare it on their Self Assessment and to do this, they should use the following:

  • Form SA103S – short if their tax affairs are simple and their turnover was below the VAT threshold for the tax year
  • Form SA103F – full if their annual turnover was above the VAT threshold for the tax year

Those in partnerships should use the SA104S or SA104F forms.

Within these forms, there are boxes which need to include payments from any of the following:

  • Self-Employment Income Support Scheme (for grants one to three)
  • Coronavirus Job Retention Scheme
  • Eat Out to Help Out Scheme
  • Any other applicable HMRC coronavirus support scheme
  • payments that they were entitled to receive from local authorities or devolved administrations

If a person has claimed a fourth SEISS grant, they will need to declare it in their 2021 to 2022 tax return.

The deadline for this is January 31, 2023.

Claims for a fifth SEISS grant can be made up until September 30, 2021.

These grants will cover three months of average trading profits, up to a maximum amount of £7,500.

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