Test and Trace Support Payment and your Tax Return

If you received a lump sum payment from the government under the Test and Trace Support Payment Scheme in England, Self-Isolation Support Scheme in Wales or Self-Isolation Support Grant in Scotland then you need to ensure that you include this on your tax return as payments received under any of these schemes are taxable as income, but are exempt from National Insurance contributions.

If you’re an employee, then you need to include the total of the self-isolation support scheme payments you’ve received in the ‘Other benefits (including interest-free and low interest loans)’ box of the ‘Benefits from your employment’ section of SA102.

If you’re self-employed or a partner in a trading partnership then you will also need to include the payment on your tax return as income.  If you generally complete a short tax return (SA200) and your profits are £6,475 or more, you may need to complete the main tax return SA100 instead.

If you’ve already submitted your tax return for tax year 2020 to 2021, but have not made the required adjustments (as given in the HMRC guidance), you will need to correct this.

HMRC have published guidance on how to report support payments relating to self-isolation due to coronavirus on self-assessment tax returns:

For more information please contact our tax associate Rebecca Oatley