HMRC has published a press release reminding Self-Assessment taxpayers that they must declare any COVID-19 grant payments on their 2020-21 tax return as these are taxable. This is an important message that must be borne in mind as the deadline for completing Self-Assessment returns approaches.
The most likely grant payments that will need to be reported in this way are Self-Employment Income Support Scheme (SEISS) payments made in the period to 5 April 2021 (the last day of the 2020-21 tax year). HMRC figures state that over 2.7m taxpayers received at least one payment during the last tax year.
The SEISS application and payment windows during the 2020-21 tax year were:
- SEISS 1: 13 May 2020 to 13 July 2020
- SEISS 2: 17 August 2020 to 19 October 2020
- SEISS 3: 29 November 2020 to 29 January 2021
However, SEISS is not the only COVID-19 support scheme that taxpayers might need to declare on their tax return.
For example, taxpayers may need to report grants on their Self-Assessment tax return such as:
- the Coronavirus Job Retention Scheme (CJRS)
- test and trace or self-isolation payments
- Eat Out to Help Out
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants
This applies to the self-employed, partnerships, and those carrying on a business. HMRC’s guidance is clear that whether or not any tax is payable will depend on the amount of taxable income together with any personal and other allowances to which they are entitled.
HMRC also has the power to recover payments, and charge penalties, where claimants have made support grant claims that they were not entitled to claim. There is no requirement to report COVID welfare payments made by a council such as those to help with council tax payments and housing benefit. If you received the £500 one-off payment for working households receiving tax credits this does not need to be reported under Self-Assessment.
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