Before Budget 2021 the Chancellor had already announced the third and fourth instalments of the Self-Employed Income Support Scheme (SEISS) payments to sole traders and members of partnerships whose income had been hit by the pandemic. The Budget brought the welcome news that there will be a fifth payment.
While the same general conditions which apply to the first three payments also apply to the fourth and fifth, you can only claim the latter two if you submitted your 2019/20 self-assessment return by midnight on 2 March 2021. The good news is that you can claim the new SEISS payments if you started self-employment or became a business partner between 6 April 2019 and 5 April 2020.
Existing legislation says that regardless of which accounting period includes the SEISS payments, they are taxable for 2020/21. This legislation is being amended because of the timing of the fourth and fifth grants, so apart from payments received after a business has ceased, all SEISS payments are taxable in the year of receipt.
Contact us for assistance with your personal and business tax affairs; or visit our Kirkwall or Edinburgh offices.