HMRC have issued the following guidance to taxpayers who may have received COVID-19 grants during the 2020-21 tax year.
“If you claimed Self-Employment Income Support Scheme (SEISS) or received Coronavirus Job Retention Scheme grants, you’ll need to include details of all the taxable coronavirus support scheme payments you received during the 2020 to 2021 tax year.
“If you are employed and received Coronavirus Job Retention Scheme (furlough) payments during the 2020-21 tax year, you will need to enter your earnings and Income Tax as stated on your P60. Your P60 will include any furlough payments you received up to 5 April 2021, so you do not need to include furlough payments on your tax return.
“If you are self-employed or in a partnership and received any coronavirus financial support, you will need to declare it on your Self-Assessment tax return.”
SEISS grants you may have received during 2020-21 include:
- 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
Grants received after 5 April 2021 will need to be declared as taxable income in the current tax year, 2021-22.
Apart from the furlough and SEISS grants you will also need to declare grants received from the following support schemes:
You need to report grants and payments from COVID-19 support schemes. These include:
- test and trace or self-isolation payments in England, Scotland and Wales
- Eat Out to Help Out
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants
Coronavirus Business Support Grants
These are grants or payments made by one of the following:
- local authorities
- devolved administrations
- any other public authority
They are also known as local authority grants or business rate grants and in all cases are taxable.
Examples of these grants in England include:
- Small Business Grant Fund
- Retail, Hospitality and Leisure Grant Fund
- Local Authority Discretionary Grant Fund
- Fisheries Response Fund
Examples of these grants in Wales include:
- Welsh Government Business Grants (Grants 1 & 2)
- Economic Resilience Fund
Examples of these grants in Scotland include:
- Business Support Fund
- Newly Self-Employed Hardship Fund
- Creative, Tourism & Hospitality Enterprises Hardship Fund
- Pivotal Enterprise Resilience Fund
- Aquaculture Hardship Fund
- Sea Fisheries Hardship Fund
Examples of these grants in Northern Ireland include:
- Small Business Support Grant Scheme
- Retail, Hospitality, Tourism and Leisure Grant
- other business-related coronavirus emergency and hardship funds
If you need more advice regarding which grants need to be declared as income, please call. We can help.