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SEISS and 30 April year ends

Income of 2020/21 or 2021/22?

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HMRC have stated that any SEISS received will be taxed in 2020/21. 

However, if my client has a 30 April 2021 year end, then the SEISS will fall in that accounting year which will form the basis of assessment for 2021/22.

So does anyone know if SEISS will be treated as an addition to his turnover for the year to 30 April 2021 assessable 2021/22 or will the SEISS be added to his 2020/21 taxable income (ie his profits to 30 April 2020)? It is relevant now for claiming a reduction in the 2020/21 payments on account.

Thank you for any thoughts and apologies if I have missed an earlier explanation of this.

Replies (13)

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By Paul Crowley
08th Aug 2020 17:59

We will find out, but I understood that there may well be a separate box for SEISS income on 2021 tax return. But who knows? The April 20 accounts do not need to be submitted until the fog has cleared.

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By lionofludesch
10th Aug 2020 11:37

It's been widely advertised that SEISS will be part of 2020/21 income, whatever your year end. The only sensible way I can see of working it is to have a new box on the return.

I have just drafted some May accounts. He has SEISS1 included in those and, if he claims SEISS2, which is currently under debate, that will appear on the 2021 accounts. We'll just have to wait and see what the return looks like. Be patient. Whatever anyone says on this thread, nobody knows yet.

Meanwhile, I'm preparing accounts under UK GAAP - or whatever it's called these days.

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By Calculatorboy
08th Aug 2020 20:32

Yep surely will have to be a new tax return box ,

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By SXGuy
09th Aug 2020 08:33

Your clients accounting year end has nothing to do with it. Why do you think it has?
Tax year 20/21. So the SEISS payment should be shown in accounts up to 30th April 20. Obviously if you've already done them then they need amending, that doesn't equate to pushing it on another year.

And the point about no body knows yet, is a silly one, because it's quite clear it's taxable in the 20/21 tax year, again has nothing to do with accounting year ends.

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Replying to SXGuy:
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By lionofludesch
09th Aug 2020 10:41

SXGuy wrote:

Your clients accounting year end has nothing to do with it. Why do you think it has?
Tax year 20/21. So the SEISS payment should be shown in accounts up to 30th April 20. Obviously if you've already done them then they need amending, that doesn't equate to pushing it on another year.

Why does the payment need to be in the 2020 accounts ?

And what about SEISS2 ? Is that to be included in the 2020 accounts too ?

At this point, we don't even know whether the trader will claim.

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Replying to lionofludesch:
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By Tax Dragon
09th Aug 2020 11:49

Agreed. Accounts and tax are not always the same. (Though, bizarrely, that figment of the imagination does seem to linger in many Awebbers' brains.)

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Replying to SXGuy:
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By Paul Crowley
09th Aug 2020 13:10

'Who Knows' relates specifically to whether the seperate box will exist. I have not seen any definitive statement.

My average subcontractor client is I suspect going to get a reversal and owe tax to HMRC.

Given that there is at least one 'accountant' being mentioned on a seperate thread that thinks that grants incuding CJRS are not subject to corporation tax I wonder if some taxpayers may suffer similar errors in understanding grants.

Probably not the time to start postponing payments on account.

As for accounts, as far as I am aware the exact dates that the grant is compensation for is not declared, so usual rules would apply being date of entitlement.

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Replying to Paul Crowley:
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By lionofludesch
09th Aug 2020 13:18

Paul Crowley wrote:

My average subcontractor client is I suspect going to get a reversal and owe tax to HMRC.

Given that there is at least one 'accountant' being mentioned on a seperate thread that thinks that grants incuding CJRS are not subject to corporation tax I wonder if some taxpayers may suffer similar errors in understanding grants.

Probably not the time to start postponing payments on account.

There may well be some anomalies. Near normal profits in the year to April 2020,
plus SEISS1 and SEISS2, assessable in 2020/21. Next to nowt profits in the year to April 2021, loss of personal allowances in 2021/22. It may be the time to review the year end and use up some of that overlap relief.

Happily, not a problem which I expect to have.

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Replying to Paul Crowley:
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By lionofludesch
09th Aug 2020 13:16

Paul Crowley wrote:

'Who Knows' relates specifically to whether the seperate box will exist. I have not seen any definitive statement.


No, there hasn't been one. Nor do we need to know for eight months.

What's important at the moment is that we know what year SEISS is to be taxed in, so that we can plan.

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By sirp2000
11th Aug 2020 15:02

Thank you to all of you for your replies - especially on a Sunday!

My client will have the exact anomaly that lionofludesch refers to: high profits to 30 April 2020 plus SEISS1 and SEISS2 all assessable 2020/21 and hardly any income to 30 April 2021 assessable 2021/22.

It seems unjust and inequitable that the SEISS payments cannot just be treated like business income he would have received in the year to 30 April 2021 had Covid19 not struck.

But since when has justice and equity had anything to do with tax?!

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Replying to sirp2000:
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By Paul Crowley
11th Aug 2020 17:53

Do not see any inequality unless ye 30 April 21 income destroyed competely, despite having the oportunity to trade for 10 months from July onwards.

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Replying to Paul Crowley:
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By lionofludesch
11th Aug 2020 18:28

Paul Crowley wrote:

Do not see any inequality unless ye 30 April 21 income destroyed competely, despite having the oportunity to trade for 10 months from July onwards.

Time will tell.

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Replying to sirp2000:
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By lionofludesch
11th Aug 2020 18:27

sirp2000 wrote:

Thank you to all of you for your replies - especially on a Sunday!

My client will have the exact anomaly that lionofludesch refers to: high profits to 30 April 2020 plus SEISS1 and SEISS2 all assessable 2020/21 and hardly any income to 30 April 2021 assessable 2021/22.

It seems unjust and inequitable that the SEISS payments cannot just be treated like business income he would have received in the year to 30 April 2021 had Covid19 not struck.

But since when has justice and equity had anything to do with tax?!

Change your year end to March 2021 to match up the SEISS with the poor profits.

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