Weekly tax highlights ― 4 May 2021

Produced by Tolley
Weekly tax highlights ― 4 May 2021

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly tax highlights ― 4 May 2021
  • Coronavirus (COVID-19)
  • Reporting self-isolation support payments on the tax return
  • Calculating income for tax credit claims and renewals: coronavirus-related payments
  • Direct taxes
  • Extended loss carry back for businesses
  • Mandatory reporting of certain types of non-taxable payments to HMRC
  • HMRC guidance: working through an umbrella company
  • Indirect taxes
  • Stamp taxes newsletter: April 2021
  • More...

Coronavirus (COVID-19)

Reporting self-isolation support payments on the tax return

HMRC has published new guidance on how to report support payments relating to self-isolation due to coronavirus on the self assessment tax return.

Individuals who are self-isolating due to coronavirus may be entitled to a £500 support payment under one of the coronavirus support schemes in the nations of the UK. Payments under the schemes are taxable and must be included in the self assessment tax return (for those required to self-assess).

For employees, the amount must be included in the ‘Other benefits (including interest-free and low interest loans)’ box of the ‘Benefits from your employment’ section in the employment supplementary pages (SA102). Individuals should also report the payments this way if they are both employed and self-employed, or employed and a partner in a trading partnership.

For self-employed individuals (or partners in a trading partnership), the payments must be included in the calculation of profits for the relevant tax year. The support payments are exempt from NIC and adjustments will need to be made accordingly (in box 102 on the self-employment supplementary pages (SA103F)).

If a taxpayer has already submitted a return for 2020/21 without the required NIC adjustments for the payments received, they should correct the return. Where a paper return was submitted, they should write to HMRC asking for the return to be amended.

Calculating income for tax credit claims and renewals: coronavirus-related payments

HMRC has updated its tax credit guidance to add a list of coronavirus-related payments which must be included in the calculation of income for the purposes of tax credit claims and renewals.

Individuals who receive grants or payments under the following coronavirus-related support schemes must include those amounts in their income for tax credit claims or renewals:

  1. bonus payment for health and social care staff (Scotland only)

  2. childminding business sustainability fund (Scotland only)

  3. coronavirus job retention scheme

  4. COVID-19 statutory sick pay enhancement scheme (Wales only)

  5. eat out to help out scheme

  6. fishing industry support schemes established

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