Working while claiming SEISS grant
Updated: Oct 21, 2020
I have seen many people worried about whether they can continue working while claiming the generous income support grant offered by HMRC, and some confusion on whether it needs to be paid back or not.
Firstly, you can take on work, whether in the same field or a different one, whether it be PAYE or self-employment. On the initial application for the SEISS, anyone who claimed it would have had to agree that they were going to continue to trade in self-employment in 20-21. This is obviously a caveat which needs to be fulfilled when completing the 20-21 tax return. Many people are self-employed and employed (as am I) and are pursuing PAYE work in the interim, but when work levels resume, they will continue in their self-employed role.
I believe that the 'continue to trade' caveat is there to stop people taking the grant, using it as a golden handshake, then retiring or leaving self-employment, when they intended to do so anyway. In this case, the applicant will need to pay the money back to HMRC as it was never intended to be a bonus.
Secondly, the grant is going to be taxed as earnings in 20-21. It is not yet clear how it will be taxed, as there is not a box on the SA100 self-assessment for the SEISS. This may change before April 2021, or HMRC may request it to be posted into the 'Other Income' section.
The origin of this information can be found on HMRC's website here under the heading "How the grant works".