Updated guidance on Covid-19 grants and tax returns for the self-employed

The SEISS (Self-Employment Income Support Scheme) remains in place till the end of September 2021, with applications for the fifth and final grant now open. As of 6 June 2021, the government had paid out £25.2 billion in grants to some 2.9 million self-employed workers whose businesses were affected by coronavirus.

To add to the stress of the past 18 months, HMRC have also kindly reminded everyone about the dreaded tax returns and issued new guidance to anyone who has benefited from government support during these trying times. I quote: “Grants and payments from schemes to support businesses and self-employed individuals during the coronavirus are taxable”. Lovely!

So what are the ins and outs? If you are self-employed, in a partnership or are a business and have received a payment to support you during the pandemic then you may need to report this on your tax return. So any payments from COVID-19 support schemes and any grants need to be reported. These include:
  • SEISS grants
  • Self-isolation payments
  • CJRS grants
  • Eat Out To Help Out
  • Coronavirus Statutory Sick Pay Rebate
  • Coronavirus Business Support grants
If you have received any grants or payments from local authorities or devolved administrations then these are included also. In Scotland these include:
  • Business Support Fund
  • Newly Self-employed Hardship Fund
  • Creative, Tourism and Hospitality Enterprises Hardship Fund
  • Pivotal Enterprise Resilience Fund
  • Aquaculture Hardship Fund
  • Sea fisheries Hardship Fund.
In Wales these include:
  • Welsh government business grants (Grants 1 & 2)
  • Economic Resilience Fund
In England these include:
  • Small Business Grant Fund
  • Retail, Hospitality and Leisure Grant Fund
  • Local Authority Discretionary Grant Fund
  • Fisheries Response Funds
And how should these be reported? When you fill out your tax returns there will be an SEISS grant box on the self-assessment form so any SEISS payments should be placed there. Any other taxable COVID-19 payments should be listed under the “any other business income” box.

There are some payments that do not fall under these categories even though they are COVID-19 related assistance. These include payments from local authorities that helped with council tax payments or housing benefits. Also, it is important to know that loans such as the Bounce Back loans or Coronavirus Business Interruption Loan Scheme are not considered COVID-19 support payments and do not need to be declared.

So there you have it. HMRC giveth and they taketh away - as the old saying goes. If you aren’t sure if the help you received is taxable or want further help and they have a dedicated helpline or you can speak to your payroll provider who should be able to assist you.

Written by Aoibheann Byrne | BrightPay Payroll software


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Karen Bennett
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