SEISS scheme and VAT returns
Last Updated on 6 August 2020
The Self-employed Income Support Scheme is a system by which the Treasury supplies a grant to eligible sole traders during the COVID-19 pandemic.
Most sole traders are not VAT registered, but some are. So how does the SEISS grant interact with VAT reporting?
It’s been tricky to find out from gov.uk, but one of my trainees has had a useful conversation with the VAT people.
Here’s what he found out:
- SEISS payments do NOT need to go in box 6. This is important if you use the VAT Flat Rate Scheme.
Anyone using the Flat Rate Scheme would accidentally pay VAT on the grant if they put it in box 6 along with everything else. - If you are NOT in the Flat Rate Scheme, you can put the SEISS grant in box 6 if you like. It’s up to you.
Some people might do this if it makes their record keeping easier. But it won’t affect the amount of VAT you end up paying.
A further thought for ALL VAT registered businesses: if you deferred your VAT payments up to the end of June 2020, don’t forget that you have to pay back the deferred VAT any time before 31 March 2021.
My contact has told me: “Repayments can be made in instalments any time, and they ask that you make them separate to any other VAT payments, so that those payments are identified and allocated properly.”
If you have any questions about VAT don’t be afraid to call the VAT helpline. I’ve always found them to be very helpful. Which is important if you’re a helpline I suppose.
VAT enquiries by phone: 0300 200 3700
Posted on 06 August 2020
Very useful & reassuring article. Most clear indeed.
I have to say that one of the most confusing things for the Flat Rate Scheme is whether to include sales to EU (ie, out of scope for UK VAT) in Box 6. Most of my searching suggests one does not need to put such sales in Box 6. Certainly one excludes them from the FRS VAT calculation, but whether one includes them in the Box 6 is ambiguous in the HMRC VAT guides. If you have any concrete answers on that, that would be another useful thing to learn about.