Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of (a) providing a rebate to people who paid tax on grant funding from the Self-Employment Income Support Scheme for the 2020-21 tax return and (b) removing the requirement that people who have received grants via the SEISS pay tax on those grants for the 2021-22 tax year.
The Government has supported UK households throughout the pandemic with nearly £400 billion of COVID support, including through the Self-Employment Income Support Scheme (SEISS). The SEISS has provided over £28 billion in grants to 2.9 million individuals.
The Government does not think it is right to allow SEISS recipients to alter the rate of tax paid on that income over time. The SEISS was designed to support those whose income had dropped temporarily due to COVID-19. Like self-employed income, SEISS grant payments are subject to Income Tax and self-employed National Insurance contributions at the recipient’s rate of Income Tax in the year it was received.
The Government has implemented an unprecedented package of support for taxpayers struggling with paying tax liabilities. HMRC has scaled up its longstanding Time to Pay policy, which allows any business or individual in temporary financial difficulty to schedule their tax debts into affordable, sustainable, and tailored instalment arrangements. Anyone experiencing difficulties paying their tax bill can discuss payment options with HMRC.