Self-Assessment taxpayers are being reminded by HMRC that they must declare COVID-19 grant and support payments in their tax return for the 2021-22 tax year.
Most grants from COVID support schemes must be reported as taxable income to HMRC.If you received a taxable support payment in 2021–2022, you must include the amount in your tax return for that year. That includes the self-employed, partnerships, and businesses.
Even though many of the grants were for the previous tax year, over 2.9 million people applied for at least one Self-Employment Income Support Scheme (SEISS) payment in 2021-22. These grants are taxable and must be reported by 31 January 2023 for the 2021-22 tax year.
The SEISS application and payment windows during the 2021-22 tax year were:
- SEISS 4: 22 April 2021 to 1 June 2021
- SEISS 5: 29 July 2021 to 30 September 2021
There may also be a requirement to disclose any other support schemes that were utilised during the pandemic on tax returns.
When claimants file for support grant payments to which they are not entitled, HMRC may retrieve those payments and issue penalties.
It is not necessary to report COVID welfare payments made by a council, like those made to help with housing benefit and council tax payments.
If you’re unable to pay your tax bill in full, HMRC may be able to assist you by setting up a Time to Pay agreement, which is an affordable payment plan. The majority of taxpayers can apply for this arrangement online.
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