HMRC’s latest guidance on Self-Employment Income Support Scheme (SEISS) payments warns that some taxpayers may be taxed on them twice. What steps are required to prevent this?
HMRC says that many of the 2020/21 self-assessment tax returns it’s received either include entries for SEISS payments that don’t match the figures it has on record or show nothing at all. As a result, it’s automatically amending those returns and sending out corrected tax calculations.
You should of course check HMRC’s amended figures to make sure they reflect only the total of the first, second or third SEISS grants you received on or before 5 April 2021. But that’s not all. You should also check that you reported the SEISS payments in the right box on your tax return. HMRC’s latest guidance tells you where the payments should be shown.
If you put the figures in the wrong place HMRC will assume you haven’t declared the payments at all. It will automatically add them which will result in you being taxed twice on the SEISS payments. To avoid this double taxation, you must submit an amended tax return reporting the SEISS figures in the right place and removing them from the part of the tax return where you originally included them.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.