For those who have received grants under the SEISS scheme; it is likely these figures must be included in claimants’ 2020-21 self-assessment tax returns.
Many might not appreciate that income tax and Class 4 National Insurance is due on the grant and payable by 31 January 2022 at the latest. There are concerns that people could instead assume the amount is exempt from tax, particularly as it is described by the government as a ‘grant’.
The government has announced recently that a second wave of grants will be paid under the scheme in August 2020.
Self-employed subcontractors in the construction industry need to watch out for the SEISS grant being paid without tax taken off. This differs from their usually taxed income.