If you’re a small business or self-employed, the government’s COVID-19 business grants and support payments may have been a lifeline. With the tax season under way, do you know which payments you need to report and how they should be reported? The government has produced guidance for individuals and in this article, we outline what you need to know.

Which COVID-19 grants do I need to report?

If you’re self-employed, a business or a partnership, and received grants or payments from COVID-19 support schemes, you will need to repay them. They are taxable and you’ll need to report them to HMRC. The Government provides the following list:

  • the Self Employment Income Support Scheme (SEISS)
  • test and trace or self-isolation payments
  • the Coronavirus Job Retention Scheme (CJRS)
  • Eat Out to Help Out
  • Coronavirus Statutory Sick Pay Rebate
  • Coronavirus Business Support Grants

When considering what to report, make sure you are working within the correct tax year. For example, if you received any of the first three SEISS payments, these will need to be reported in your 2020/2021 tax return. The 4th and 5th SEISS payments will be reported in the 2021/2022 return.

Loans, such as Bounce Back Loans or those from the Coronavirus Business Interruption Loan Scheme (CBILS), are not COVID-19 support payments so don’t need to be reported.

Business Support Grants

These grants or payments, also known as local authority grants or business rate grants, will have been made to you by local authorities or devolved administrations.

In England the grant would have been one of the following:

  • Small Business Grant Fund
  • Retail, Hospitality and Leisure Grant Fund
  • Local Authority Discretionary Grant Fund
  • Fisheries Response Fund

In Scotland, Wales and Northern Ireland, the grants were different, and information on these can be found on Gov.UK. 

Where do I include grants on my tax return?

Firstly, SEISS payments should be placed in the Self Employment Income Support Scheme Grant box. In addition, other taxable COVID-19 payments should be added to the Any Other Business Income box.

If you’re in a partnership, reporting of your SEISS payment may be different, depending on how the money was distributed. You can find more information on this at Gov.uk.

What if I have multiple trades?

If you have more than one business, for example, it’s referred to as multiple trades. Your self-assessment form will need to show which business you claimed the grant or support payment for. If the grant was to support multiple businesses, the amounts used will need to be allocated appropriately.

Can I be fined if I don’t report COVID grants?

In short, if you fail to report a COVID grant or support payment, then HMRC has the authority to charge a penalty for deliberate non-compliance.

Further guidance on reporting COVID grants and support payments

Reporting grants and loans received during COVID is something new. So, if you’re unsure about what to include or how to report it, speak to your accountant. If you have paid back a grant or part of a grant, this can and should be outlined in your tax return too.

Don’t leave your tax return to the last minute and risk a fine. Find out what will need to be included and what won’t be.

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About Liz Cordell

I’m an experienced copywriter, with a great attention to detail. Having previously held positions at a global publisher, a top 100 law firm and a Big Four professional services firm, I now work with clients across a range of industries. Whether it’s new content for a website or creating interesting blogs for my clients, I can create engaging copy that doesn’t take a lifetime to read.

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