Tax returns are more complicated this year for the self-employed if you have received SEISS grants.
The first 3 SEISS grants need to be reported as they are taxable.
If the grants are not added in the correct place, or do not agree with HMRC records, then HMRC have been sending revised tax calculations which could lead to you paying more tax and NI than necessary.
As an example, if you received a grant of £5000, but included this as turnover on your tax return then HMRC will assume you haven’t included the grant and will issue a tax demand that will request the tax and NI is paid twice. It will be necessary for you to send a revised tax return (with the corrected turnover) if the grant has been included twice.
If you forget to add the self-employed section on the tax return, HMRC will assume you are not self-employed and ask for all the grants to be repaid. Again, it will be necessary to redo the tax return to include the correct information.
If you have not claimed SEISS, but HMRC calculations show you have, please phone them on 0800 024 1222 as someone may have claimed fraudulently.
If you do get a letter from HMRC, please check their figures are correct. You will need to check the SEISS grants agree with your figures and that the turnover does not include the SEISS grant. There are 30 days to appeal if you believe HMRC have made a mistake. Please don’t leave it in that brown envelope!
I would advise not to leave it too late this year to file the tax return, to avoid getting a shock with a revised bill shortly before payment is due.
Please let me know if you need any help with filing your tax return or checking HMRC’s revised calculations.