If you received financial support through the Self-Employment Income Support Scheme grant, you will need to include it in your Self Assessment tax return.

What is SEISS?

SEISS, or the Self-Employment Income Support Scheme formed part of the support package for businesses suffering during the coronavirus pandemic. The scheme was launched by the Government on 13th May 2020. The first grant provided self-employed workers a grant of 80% of their profits up to a maximum amount of £2,500 a month, covering from March to May 2020. Subsequent versions of the scheme awarded varying levels of financial support to struggling sole traders.

Why do I need to include SEISS in my tax return?

The Self-Employment Income Support Scheme basically sets out to replace lost income and as such, it’s taxable in the same way that your regular income would be. This means that you’ll need to include it on your Self Assessment tax return, so that you can pay the right amount of income tax and National Insurance on it.

The amount of grant that you receive will be included in your tax calculation, so you must show it on your Self Assessment tax return.

Which tax return should I include my SEISS payment in?

Although you receive each grant as a single payment, the grants actually span three month periods at a time. You should include any SEISS payments in the Self Assessment tax return which covers the time period that your grant payment covers.

For instance, the third grant covered November 2020, December 2020, and January 2021. This time period falls into the 2020-21 tax year, so you’ll need to include it in your 2020-21 Self Assessment tax return, which is due by 31st January 2022.

How much tax and NI will I have to pay on my SEISS grant?

The amount of tax and National Insurance you have to pay on your income depends on how much you earn. This is because of the way that different income thresholds and tax allowances affect the way your bill is calculated. Read our article about income tax and national insurance for the self-employed to learn more.

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