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OCL: Did you claim the Self-Employed Income Support Scheme Grant and have you received a letter from HMRC that you are unsure how to address?

… are you aware that the amount received is taxable as income?

HMRC has recently published guidance suggesting that those who made a claim under the SEISS scheme need to check that they have recorded the income in their 2020/21 tax return correctly.

The notice forms part of HMRC’s clampdown on incorrect and false claims. HMRC have advised that they are currently investigating around 12,000 such cases.

Up to date guidance has been issued by HMRC following their discovery that many of the self-assessment tax returns already submitted for 2020/21 include entries that don’t match the figures they have on record.

To refresh your memory, all self-employed payments from the first, second and third grants should be included on your 2020/21 tax return in the ‘’Self-Employment Income Support Scheme grant’’ box because the grants are assessable as income. For those of you who intend to file your tax return yourself by paper (i.e., before the 31st of October) this is box 70.1 of the self-employment pages should you use the full self-employment pages or box 27.1 should you use the short self-employment pages.

If you have already submitted your tax return and discover that you have recorded the payments in the wrong place, it is recommended that you submit an amendment to your tax return to HMRC. If you don’t, HMRC will assume that you have not reported the payments and will automatically amend your tax return. If you have included the figure but in the wrong box you may be taxed twice on the same income.

HMRC are also automatically amending tax returns where the amount of SEISS payments reported do not match the payments recorded on their computer system. In this instance HMRC will issue a revised tax calculation which you should review.

Should you receive an amendment from HMRC (or any other letter) do not ignore it! We are here to help if you need it.