Your SEISS payments are taxable
Posted on 26th May 2021
If you are a self-employed contractor working under the construction industry scheme (CIS) your tax is automatically deducted, normally at 20%, from your payments.
If you are on a lower income, you will normally be entitled to a refund because you can claim back your business expenses and personal tax allowance. To receive your refund you must first submit your self-assessment tax (SAT) return.
If you have claimed under the Self-employment Income Support Scheme (SEISS) during the coronavirus lockdown periods you don’t have to repay the grants you have received. However, the grants will be treated as income so they must be included in your SAT and you will have to pay income tax and National Insurance (NI).
Depending on your work during the pandemic, you might find that you won’t receive as much or any refund following your 2020/21 SAT return.
Did you receive the right amount?
Any overpayments from SEISS should be notified to HMRC within 90 days of receiving the grant.
This could include payments that you were not entitled to or that are higher than HMRC said you should receive when your claim was made. You will have until the end of January 2022 to return any overpayments without receiving a fine.
However, there are severe penalties for abuse of the scheme and you could be charged a penalty of up to 100% of the overpayment. HMRC will take account of whether you knew you were entitled to the grant when you received it or when it should have been repaid or taxed because your circumstances changed.
The fourth round of SEISS
2021 until 1 June. This round will include your 2019/20 and 2020/21 SAT returns if you are newly registered as self-employed. To claim you must be self-employed or a member of a partnership. You can’t claim the grant if you trade through a limited company or a trust.
You must show that you experienced new or continuing loss of profits from February to April due to the coronavirus measures.
You will also be asked to declare that you will continue to trade, or that you were previously trading but are now unable to because of the pandemic. If you meet the criteria, you can claim 80% of your average monthly profits, capped at £2,500. To apply, you will need your:
Self Assessment Unique Taxpayer Reference (UTR)
National Insurance number
Government Gateway user ID and password
details of a UK bank that can accept BACS payments, including the account number, sort code, name on the account and address linked to the account.
You might also be asked to answer questions about your passport, driving licence or information on your credit file.
You must make the claim yourself so you can’t ask a tax agent or adviser to claim for you.
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