As Self-Employment Income Support Scheme (SEISS) grants are taxable, these should be declared on the tax return.
Advice for those in partnerships
If partners claimed under SEISS, how the grants is treated for tax purposes depends on who received the grants.
- For most partners, HMRC paid the SEISS grant directly into individual bank account, meaning it is not recorded as partnership income in the partnership accounts. Those who received SEISS grants in this way should report the grant as an addition to their partnership income on the partnership supplementary pages. Grants paid on or before 5 April 2021 should be included on the 2020-2021 return, using box 9.1 on the partnership supplementary pages (SA104S or SA104F). The SEISS grants should not be included on the partnership tax return (SA800).
- If the grant was paid to the partnership and treated as partnership income, included in the partnership accounts and distributed to all partners in line with the partnership agreement, then include the grant amount within the turnover boxes on the partnership tax return (SA800). SEISS grants should not be included on the individual’s partnership supplementary pages (SA104S or SA104F) as they would already be reflected in the amount of income received from the partnership. Take care not to report the grant again on the SA104S or SA104F, as you may be taxed twice.
What to do if the accounting year is different to the tax year
All SEISS grants received before 6th April 2021 are taxable in the 2020-2021 tax year, regardless of the accounting period. This is because SEISS grants are intended to provide broadly real time support for businesses during the pandemic. HMRC state that Taxing SEISS grants in this way ensures fairness, in that all recipients report and pay tax on the grant at the same time, regardless of their accounting date. For most claims, the first, second and third SEISS grants were paid on or before 5th April 2021.
If the return is amended by HMRC
If you claimed a grant but did not fill in the box for SEISS grants on the return, or if the amount in the box is different to HMRC records, they will update the return and make contact. You should check the changes HMRC make and follow the instructions at:
PAYadvice.UK 20/10/2021
