Declaring COVID-19 grants on tax returns

HMRC is reminding taxpayers who received COVID-19 grant payments during the 2020/21 tax year to declare them in their tax return.

More than 2.7 million taxpayers claimed at least one Self-Employment Income Support Scheme (SEISS) payment up to 5 April 2021. These grants are taxable and individuals should declare them on their 2020/21 tax return before the deadline on 31 January 2022.

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; and
• SEISS 3: 29 November 2020 to 29 January 2021.

The self employed should use:

• form SA103S – short if their tax affairs are simple and their turnover was below the VAT threshold (£85,000) for the tax year;
• form SA103F – full if their annual turnover was above the VAT threshold for the tax year.

Those in a partnership should use:

• form SA104S – short if they’re only declaring partnership trading income;
• form SA104F – full to record all the possible types of partnership income they might receive.

SEISS is not the only COVID-19 support scheme that should be declare on the tax return. If other support payments were received, they may also need to be reported on the tax return. Information on which support payments need to be reported to HMRC and any that do not is available here.

Employees who received Coronavirus Job Retention Scheme (furlough) payments during the 2020/21 tax year will need to enter their earnings and income tax as stated on their P60. Their P60 will include any furlough payments they received up to 5 April 2021, so they do not need to include furlough payments on their tax return.

HMRC recently announced that more than 20,000 taxpayers, who were unable to pay their tax bill in full, had used the self-serve Time to Pay facility, worth £46 million. The online payment plan enables taxpayers to spread the amount into manageable monthly instalments, up to the value of £30,000.

If taxpayers owe more than £30,000, or need longer to pay, they should call the self-assessment payment helpline on 0300 200 3822.

HMRC is also urging everyone to be alert if they are contacted out of the blue by someone asking for money or personal information. Taxpayers should always type in the full online address www.gov.uk/hmrc to get the correct link for filing their self-assessment return online securely and free of charge.

HMRC says that it sees high numbers of fraudsters emailing, calling or texting people claiming to be from the department. If in doubt, HMRC advises not to reply directly to anything suspicious, but to contact them straight away and to visit GOV.UK to check how to identify HMRC-related scam phone calls, emails and text messages.

If you would like assistance with your tax return, please contact us here.

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Sources: Techlink