SEISS is taxable: LITRG alerts self-employed

SEISS-taxable-savings-people-money-benefit

LITRG has alerted self-employed individuals that the government’s coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS) is taxable.

The Low Incomes Tax Reform Group (LITRG) is concerned that many may wrongly assume that the SEISS funds are exempt from tax, particularly as they are termed ‘grants’ by the government. It is warning that many people may have to pay a third of the grant back in tax and Class 4 national insurance contributions (NICs).

Looking for a best estate agent in Leeds? Click here also!

The LITRG said that they might include grants made to the self-employed via the SEISS in claimants’ 2020/21 self-assessment tax returns.

Commenting on the issue, Victoria Todd, Head of the LITRG, said:

‘Many claimants of the SEISS grants might, understandably, use the money as soon as they get it, for example, to catch up on liabilities or to meet essential living costs – but they need to think now about budgeting for income tax and national insurance on it.’

If you need any help or need guidance, please feel free to call us on 0113 8870 218.OR visit us for details about current tax matters.

Guidance: How the SEISS grant works

If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.

The grant does not need to be repaid but will be subject to Income Tax and self-employed National Insurance.

Hence, HMRC will work out if you’re eligible and how much grant you may get. But you can follow these steps to help you understand how we will do this and what you can do now.

Who can claim

You can claim if you’re a self-employed individual or a member of a partnership and if you:

  • traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
  • traded in the tax year 2019 to 2020
  • intend to continue to trade in the tax year 2020 to 2021
  • carry on a trade which has been adversely affected by the coronavirus

Leave a Reply

Your email address will not be published. Required fields are marked *