Tax year for SEISS payments
Q: My client is self employed and has a year end of 30 April. Client received Self Employed Income Support Scheme (SEISS) payments in June and August 2020, will these be taxable in the 2021/22 tax year as they were received after his year end?
A: SEISS payments made to self employed individuals are taxable in the 2020/21 tax year irrespective of their year end for accounting purposes. They are added to his other income for the year and are reported on the tax return in box 27.1 on the Self Employment (Short) pages or in box 70.1 if completing the Self Employment (Full) pages.
If an SEISS payment is received by an individual who is a partner in a partnership the above rules also apply but only if he retains the SEISS payment himself. If so it is reported in box 9.1 on the partnership pages of his tax return. If the payment is shared amongst the other partners then the SEISS payment is added to the partnership’s trading profits for the year and taxed under normal principles.
These rules apply only to payments received under the Self Employment Income Support Scheme, other grants or coronavirus support payments received are taxed as normal using standard accounting principles.