Anyone who has claimed the Self-Employment Income Support Scheme (SEISS) in the last year is being urged to look out for a letter from HM Revenue & Customs (HMRC).
The letter clarifies that claimants must submit or amend their 2019/20 tax return to include the relevant information within 30 days of receipt, or repay the grants they received in full.
The first three grants were paid between March 2020 and January 2021 and must be included as taxable turnover in 2020/21. However, HMRC is currently sending a letter to taxpayers regarding their 2019/20 returns.
Those individuals that ceased to trade in 2019/20 were not eligible for the grant and must repay it in full. In cases where the grants were received more than 90 days before it is repaid, they may also be liable for a penalty.
SEISS payments were introduced by the Chancellor during the pandemic to support the self-employed whose business was hit by the pandemic.
It took the form of five separate grants. Applications for the fifth and final grant closed on 30 September.
The letter says:
Filing a tax return is a requirement to be eligible for SEISS. We are writing to you as you have either:
• Not submitted an Income Tax Self-Assessment return for 2019-2020.
• Have submitted a return but have not completed the self-employment or partnership page(s).
You need to file your return and/or complete those pages so we can check you are eligible for the SEISS grant you claimed.
The SEISS grants are taxable in the tax year in which they are received. So, the first three SEISS grants are taxable in the 2020/21 tax year and they should be reported in full in your 2020/21 Self-Assessment tax return.
If you’re self-employed and you received a SEISS grant in the fourth or fifth rounds, they’re taxable in the 2021/22 tax year and should be reported on your 2021/22 Self-Assessment return.
For help and advice on personal tax matters, please get in touch with our expert team today.