Reporting self-isolation support payments

HMRC has published new guidance How to report self-isolation support payments on how to report Covid-19 self-isolation support payments 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 covid 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 (and 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 NICs, and adjustments will need to be made accordingly (in box 102 on the self-employment supplementary pages (SA103F).

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