Many self-employed people and partners in partnerships claimed the fourth and fifth Self-Employment Income Support Scheme (SEISS) grants during the COVID19 lockdowns last tax year. These payments are taxable and need to be included in the correct boxes of your 2021/22 tax return.
There is however, potentially an easy-to-make mistake that can see you taking a double tax hit on this income.
The fourth and fifth SEISS grants should be included on the 2021/22 Self-Assessment tax return in box 27.1 on the SA103S self-employment short supplementary pages and box 70.1 on the SA103F self-employment full supplementary pages.
In some instances, the SEISS grants may be pre-populated if you use the HMRC online software to complete your return. If you include the grant income in your business turnover when you complete your online tax return you may end up paying tax on it twice. Make sure you check any pre-populated entries on your return.
If the SEISS grant is not included in the correct box of your return, HMRC will automatically amend the return to include it and send you an updated calculation. If you added the SEISS grant to your sales figure, HMRC will not know this, and you will end up paying tax on the grant twice. If this happens, you will need to amend your return to remove the grant from your sales and include it in box 27.1 or 70.1 to get back to the right tax position.
If you received the SEISS grant and need help in completing your tax return, then please do get in touch.