During the covid-19 pandemic the government announced a number of schemes to help people financially who were suffering a loss of income. One of those schemes was the Self Employment Income Support Scheme (SEISS) and here we are addressing the question – ‘Is the SEISS payment taxable?’

In order to receive the grant you needed to be set up as self-employed and traded in both 2018/19 and 2019/20 as well as expecting to continue to trade. There were other criteria that were set and those who had recently set up as self-employed found themselves excluded from the scheme.

Those who were eligible received a number of grants based on their previous 3 years declared self-employed earnings and these were paid in lump sums throughout 2020. The payments slightly differed as to which one you claimed but for each grant you could only claim if you had been adversely affected by the crises.

If you received one or other of these payments then the short answer is that the payments are indeed taxable. Being self-employed, you need to declare these amounts in your 2020/21 self assessment tax return and they will be included in your taxable earnings for 2020/21.

It also looks likely that there will be another payment in 2021 that may span the 2021/22 tax year so that will need to be recorded there (and may indeed need to be split over the 2 tax years as the (currently) last payment is cited to be for February to April 2021.

These payments also are counted towards any national insurance you may need to pay.

So essentially you need to treat these payments as earnings although we would expect that there will be a specific place to report them in your tax return next year.

You can find further information on the later SEISS payments on the government website here.