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As the clock ticks towards the self-assessment return deadline, HMRC is reminding those people awarded Covid grants they must declare them.

Anyone receiving some or all of the first three Self-Employment Income Support Scheme (SEISS) payments must include them as income. While the grants were not a loan and did not need repaying, they are taxable at the normal rate.

SEISS Covid grants to declare

It’s hard to believe that almost two years ago, the UK was being told it was entering a ‘lockdown’. In response to the devastating impact on businesses and the self-employed, the UK government announced SEISS.

While there were a total of five SEISS grants, the current return deadline is for payments made during the 2020-2021 tax year. These include:

  • Self Employment Income Support Scheme 1: 13th May 2020 to 13th July 2020
  • SEISS 2: 17th August 2020 to 19th October 2020
  • SEISS 3: 29th November 2020 to 29th January 2020

Anyone receiving the remaining two SEISS grants must declare them on the tax return they submit by 31st January 2023.

Other Covid grants to declare

Self-employment grants are not the only payments that need declaring. HMRC says you must also report the following payments on your return:

  • Eat Out to Help Out
  • The Coronavirus Job Retention Scheme (CJRS)
  • Test and trace or self-isolation payments
  • Coronavirus Statutory Sick Pay Rebate
  • Small Business Grant Fund
  • Coronavirus Business Support Grants

The Small Business Grant Fund – which was £10,000 – was based on the rateable value of business property. Some councils awarded smaller support grants and they must also be declared.

You must provide the correct information if you have yet to complete your return. If you have already filed your return and failed to declare any grants, make sure you inform HMRC soon. Also, make sure you provide all the relevant information to your accountant if you use one to complete your returns.

We will ask our clients to declare them, but we can only complete returns on the details you provide!

The return also includes a declaration where you can admit accessing grants that you were not entitled to. HMRC has made it clear that they will impose large fines on anyone who has not declared grants they have received.

Late filing fines and penalties waived

HMRC’s reminder comes as it announced it will waive fines for those missing the 31st January self-assessment tax return deadline. The tax office is also waiving penalties for late payments – but, like the fines, only until 28th February.

HMRC decided to effectively push back the deadline by a month because the omicron variant has hit many business owners.

Our advice is that you should still complete your return by the deadlines if you possibly can. While waiving penalties, HMRC still charges the 2.75% interest rate.

If you’re unsure about which grants to include on your tax return, speak to a member of our team today using our contact form.