SEISS and Self Assessment

[Jon12345]

I received a few Covid SEISS grants and went through a YouTube video where the guy said put on your self assessment form the grants you received from 4/20 to 4/21. That part is clear. What I am unsure about is if that only applies if your accounts year is 4/20 to 4/21. Mine run from 1/1/20 to 31/12/20.

Since mine run Jan to Dec, do I only include the SEISS payments for that period, or do I instead run them from 4/20 to 4/21?

 

[Newchodge]

If you are not working through a limited company your tax year for self assessment is 6 April to 5 April. Having a different tax year for your own records is irrelevant.

 

[DWS]

If you are not working through a limited company your tax year for self assessment is 6 April to 5 April. Having a different tax year for your own records is irrelevant.

This is actually incorrect, it is called basis periods and if the business has been trading for a number of years (first years basis periods may differ) then it is the profits/losses made between 01/01/2020 and 31/12/2020 which will be included on the 2020/2021 tax year, not 6 April to 5th April.

 

[Newchodge]

This is actually incorrect, it is called basis periods and if the business has been trading for a number of years (first years basis periods may differ) then it is the profits/losses made between 01/01/2020 and 31/12/2020 which will be included on the 2020/2021 tax year, not 6 April to 5th April.

Thank you I wasn't aware of that. Is that due to change soon?

 

[DWS]

Yes, I believe it is changing with 2023/2024 being the transition year

 

[DWS]

Just realised I never answered the question, the first 3 SEISS grants need to be included on your 2020/2021 tax return.

 

[Jon12345]

Ah, thank you @DWS!

 

[Jon12345]

Actually @DWS, I do have one more question! I understand I need to put it on my tax form, but am I also supposed to put it into my accounts in Xero? Since it comes from the government I am assuming not, but I might be wrong.

 

[DWS]

I do not use Xero, it should not form part of your accounts but will be included on the tax return and be part of your profits from self-employment in the tax calculations

 

[Ivel]

Actually @DWS, I do have one more question! I understand I need to put it on my tax form, but am I also supposed to put it into my accounts in Xero? Since it comes from the government I am assuming not, but I might be wrong.

It does form part of your accounts and I guess you can put it under "other revenue" or something like that. It is a government grant and it is taxable even if it is not part of your trade. No VAT.

 

[DWS]

It does form part of your accounts and I guess you can put it under "other revenue" or something like that. It is a government grant and it is taxable even if it is not part of your trade. No VAT.

Trouble is then if you are using commercial tax software (I use Taxfiler) you will need to remove the grant before it populates the tax return, otherwise it will include it in the other income box which is incorrect as it should be in the SEISS box, and then you will find that you will end up being taxed on it twice as HMRC will think you have not included it in the return.

 

[Jon12345]

All done now. Thanks for the help guys.