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This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

At a glance

What's new? 

Overview

General rules

Self-Employment Income Support Scheme (SEISS)

SEISS Example 1

A sole trader with a 31 May 2020 year-end realises profits of £30,000 under the cash basis. In June 2020 they receive a SEISS payment of £7,500 and a further £6,570 in August 2020. No further SEISS amounts are claimed.

SEISS Example 2

A partner in a trading partnership receives a single SEISS payment of £4,500 in 2020-21 which they retain. No further amounts were claimed. For the year ending 30 April 2020, their share of partnership profits is £25,000.

Employment-related schemes including the Coronavirus Job Retention Scheme (CJRS) and Coronavirus Statutory Sick Pay Rebate Scheme

Grant schemes other than the SEISS and employment-related schemes

Self-isolation schemes

Self-isolation schemes: tax return reporting

Employees should:

The self-employed (including partners in a partnership) should:

Partnerships:

Professional Conduct in Relation to Taxation (PCRT)

Tax agents must ensure they act appropriately when reporting grants received by clients where the eligibility conditions may not have been met.

The Chartered Institute of Taxation (CIOT) has prepared guidance which has been reviewed by HMRC: 

The fundamental principles and requirements set out in PCRT also apply to other Coronavirus support.

SEISS tax year flowchart

Use this flowchart to help determine in which tax year SEISS grants should be taxed.  

Is the taxpayer self-employed as a sole trader?

Yes

Is the grant SEISS round 1, 2 or 3? 

Yes

The first, second and third SEISS grants are taxed in 2020-21.  

 

No ↓ 

 

 

No ↓

 

 

 

The fourth and fifth SEISS grants are taxed in 2021-22.

 

 

 

 

 

 

 Did the taxpayer receive the grant in their individual bank account and it is not recorded as income in the partnership accounts?

No

SEISS grants paid to a partnership and not retained by the partner are treated as the partnership’s trading income and are taxed according to the accounting period of the partnership.

 

 

Yes ↓         

Is the grant SEISS round 1, 2 or 3?

Yes

The first, second and third SEISS grants are taxed in 2020-21. 

 

 

No ↓  

 

 

 

 

The fourth and fifth SEISS grants are taxed in 2021-22.

       

 

2020-21 tax return boxes

A number of new boxes have been added to 2020-21 tax returns to report coronavirus related support. 

Natural persons

All taxpayers receiving coronavirus support payments

1. SA100: the main tax return

2. Self employed sole traders

If you have claimed SEISS grants you will have received up to three cash grants in the tax year ending 5 April 2021.

SA103S & SA103F Self Employment pages

Your SEISS grant income is reported in the Self Employment section of your tax return:

3. Partnerships

SEISS grants paid to a partnership bank account and not retained by the partner are treated as the partnership’s trading income and are taxed according to the accounting period of the partnership.

Alternatively, if the SEISS grant was claimed and received by individual partners into their bank accounts and not reported as partnership income, the grants are declared by the individuals as follows:

SA104S: Partnership (Short)

SA104F: Partnership (Full)

4. Landlords

SA105: UK Property

HMRC's tax return notes contain further detail of how to deal with specific cases.

Non-natural persons (companies)

Coronavirus support payments should be included as income when calculating taxable profits in the usual way, in line with the relevant accounting standards.

There are additional CT600 reporting requirements for CJRS and EOTHO grants:

These boxes were added to the CT600 on 6 April 2021.