SEISS grants – are they taxable?

Date posted: 6th Apr 2021

In short, yes.

However, the timing of the taxation of grants such as the self-employment income support scheme (SEISS) grants may be a little odd. The grants are usually taxed in the tax year of receipt – this may differ from your accounting period if your accounts are not drawn up in line with the tax year.

For instance, your sole trader accounts may be drawn up to 30 April each year, which means that the profits from the year to 30 April 2020 will be declared on your 2020/21 Tax Return. Whilst the grants may form part of your accounts for the period to 30 April 2021 (taxed in 2021/22), the grants will actually be taxable in the tax year to 5 April 2021.

However, there is a slight difference in relation to the treatment of grants received by a partner of a partnership, if those grants are retained by the partnership rather than retained by the partner.

The HMRC manual explains the treatment https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim40458

As you will note there may be additional complications for farmers, due to the averaging election that they can make.

In addition, any CIS workers will need to remember that the SEISS grants are paid without the deduction of the CIS tax. This means that you may not be in the “usual” position of claiming a refund.

If you have any queries, please contact our tax team here.


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