How to report Covid-19 grants on your tax return
2-minute read
Filing your tax return may look a little different this year if you’ve been one of the many small businesses and self-employed who received financial support during the pandemic.
That’s because these Covid-19 grants and support packages are taxable and you need to report any payments to HMRC.
How to declare Covid-19 grants on your tax return
If you received any coronavirus financial support grant payments during the 2020-21 tax year, you must declare this on your tax return.
Read on to find out the financial schemes you need to report to HMRC, and how to declare them if you’re self-employed, in a partnership, or a small business.
Reporting SEISS payments
The Self-Employment Income Support Scheme (SEISS) was initially introduced to cover three months, but throughout the pandemic there have been five grants.
These grants are taxable income, so you must report anything you received on your Self Assessment tax return.
For the 2020-21 tax year you’ll just need to declare if you received support for the first three grants. If you received later payments from the SEISS grant 4 or 5, you’ll report this in your 2021-22 tax return.
Here’s a reminder of the application and payment windows for the SEISS grants.
SEISS grant | Application and payment window |
|---|---|
SEISS 1 | 13 May 2020 to 13 July 2020 |
SEISS 2 | 17 August 2020 to 19 October 2020 |
SEISS 3 | 29 November 2020 to 29 January 2021 |
Fortunately the process for reporting this grant is relatively simple. You just need to add any SEISS payments to the ‘Self-Employment Income Support Scheme Grant’ box on your tax return. Other support should be recorded in the ‘business income’ box.
For more guidance, gov.uk has notes on how to report your grant or payment:
Other payments you need to report
As well as SEISS grants, other coronavirus financial support you need to report include:
- test and trace or self-isolation payments in England, Scotland, and Wales
- the Coronavirus Job Retention Scheme (furlough)
- Eat Out To Help Out
- Coronavirus Statutory Sick Pay Rebate
- Coronavirus Business Support Grants
As we’ve mentioned above, for Self Assessment you should record these payments in the ‘business income’ box.
If you’re unsure whether a payment you received is taxable, you can contact the coronavirus helpline for businesses and the self-employed.
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Coronavirus business support grants
Throughout the pandemic we saw different business support packages and grants issued by local authorities and devolved administrations.
Some examples of grants we saw across the UK are listed below. These business support grants are taxable and need to be recorded on your tax return.
England:
- The Restart Grant
- Small Business Grant Fund
- Retail, Hospitality and Leisure Grant Fund
Wales:
- Welsh Government Business Grants
- Economic Resilience Fund
Scotland:
- Business Support Fund
- Newly Self-Employed Hardship Fund
- Creative, Tourism and Hospitality Enterprises Hardship Fund
Northern Ireland:
- Small Business Support Grant Scheme
- Retail, Hospitality, Tourism and Leisure Grant
Reporting payments on your company tax return
Coronavirus Job Retention Scheme grants and Eat out to Help Out payments need to be reported when you file your company tax return.
You’ll see specific boxes on your tax return for these grants and payments, so it should be relatively straightforward to include.
It’s also important that you include these payments (and any other taxable Covid-19 payments) as income when calculating your taxable profits as part of your business accounting.
Gov.uk has more guidance on how to report grants on your company tax return or for Self Assessment.
How to complete your Self Assessment
For tips and resources on completing your tax return, visit our Self Assessment tax hub and watch this video:
Made a mistake with your tax return?
If you’ve already filed your tax return and forgotten to declare any financial support packages, it’s possible to make changes online.
Read our guide to amending your tax return if you need to correct something.
We want to help make the tax return process as smooth as possible for you. Check out our tax and Self Assessment hub for free guides and resources for the self-employed.
Photograph 1: zinkevych/stock.adobe.com
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Written by
Catriona Smith
Catriona Smith is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
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