If you’re self-employed or have property income from between 6 April 2020 to 5 April 2021, you have until midnight on 31 January 2022 to file.
This is also the deadline to make your first payment on account for 2020/21, while you might need to make a balancing payment as well.
Now, we all know that 2020/21 was a year like no other.
Westminster provided emergency financial support to prop up the UK economy as the COVID-19 pandemic took hold.
If you claimed a grant through the self-employed income support scheme (SEISS) during 2020/21, it is part of your taxable income for this return.
Records you need
Back in September 2020, we advised clients to retain any records from the SEISS for the purpose of filing this particular tax return.
Depending on your eligibility for the scheme, there were three SEISS grants issued to qualifying claimants during the 2020/21 tax year.
The first and the third grants were both worth up to £7,500, while the second grant was worth up to £6,570.
That’s a potential total of up to £21,570, of which the excess (£9,070) above the personal allowance (£12,500) is taxable at your marginal rate.
If you were one of them and you haven’t already filed your return, you will need:
- the claim reference number
- the total amount you claimed from the three SEISS grants.
Reporting the SEISS grants
Whether you are doing your own tax return or filing a return on behalf of your general business partnership, you must report income from the SEISS.
For sole traders, you will disclose the total amount you received in the ‘other tax adjustments’ section of your self-assessment tax return.
For nominated partners, this forms part of the ‘trading or professional profits’ section of the partnership return.
SEISS income will also be liable for Class 4 National Insurance contributions (NICs), and form part of the small-profits threshold for Class 2 NICs.
You will need records of any income from sales or receipts from business expenses incurred in 2020/21.
Records of any personal income, such as from investments, savings, pensions, or rent, should also be declared in your tax return.
This will all count towards your total taxable income for the tax year before being assessed for income tax and NICs.
Issues for newcomers
HMRC is experiencing long delays with processing requests for unique taxpayer reference (UTR) codes, but fear not.
If you are new to self-assessment and have not received your UTR code, you will not incur a penalty if you miss the 31 January 2022 deadline.
Instead, you will have three months to submit their tax returns from the date your self-assessment record is set up.
It’s also possible to use your NI number to activate your personal tax account and file your tax return through self-assessment.
If you are going through it for the first time or you have left it too late to do your own return, our personal tax planning service can help.
To find out more about what our expert team can offer, email us at firstname.lastname@example.org or call us on 0141 221 257.