New guidance will help the self-employed decide whether they need to include a Covid-19 grant or support payment in their 2020/21 tax return.

If you received financial support during the coronavirus pandemic, here’s what you need to know.

What financial support is available?

The Self Employment Income Support Scheme (SEISS) was launched in May last year to support self-employed workers whose income has fallen as a result of coronavirus disruption.

SEISS grants do not have to be repaid but are considered taxable income and should therefore be included in your tax return.

The initiative, now in its fifth iteration, is currently accepting applications. Click here to find out if you are eligible for support.

Test and trace or self-isolation payments can also be claimed and should be reported in your tax return.

How should SEISS grants be reported?

SEISS grants should be placed in the Self Employment Income Support Scheme Grant box on your Self Assessment form, while all other taxable COVID-19 payments should be reported under the any other business income box.

What payments should not be reported?

HM Revenue & Customs (HMRC) has confirmed that welfare payments made by a council to an individual should not be reported in your Self Assessment tax return. These may include payments to help with council tax or housing benefit.

In which tax year should coronavirus grants and payments be reported?

SEISS grants are taxable in the tax year in which they are/were received. This means the first three grants should be reported in your 2020/21 tax return, while the fourth and fifth grants should be reported in your 2021/22 tax return.

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