SEISS. Using these payments to contribute toward personal pension.

CharlieCheeze

I'm in receipt of the first two SEISS (Self Employed Income Support Scheme) grants. I'm trying to calculate how much I can pay in to my SIPP this financial year, with the possibility of tax relief on the amount.
As the SEISS is so new, I'm finding it very difficult to get a definitive answer as to whether the grants are considered 'relevant earnings' for the purpose of tax relief. Or even whether they are allowed to be paid in to the pension as part of my earnings. 

NottinghamKnight

I have seen it reported that SEISS is relevant earnings and can be paid into a pension as part of your overall earnings, you can always contact HMRC to check and get definitive advice. 

CharlieCheeze

NottinghamKnight said:

I have seen it reported that SEISS is relevant earnings and can be paid into a pension as part of your overall earnings, you can always contact HMRC to check and get definitive advice. 

Thanks for that. I've read that too, but it was dated right at the start of the scheme and with some ambiguity. I've been trying to get hold of someone at HMRC that can answer the question, but as yet, despite 2 hours on the phone and several web chats, the elusive answer isn't forthcoming. I still have a couple of months, so fingers crossed I can find out. 

Secret2ndAccount

Here is a link to HMRC's internal manual on this subject, including several simple examples

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim40458 

If you are a sole trader, SEISS is treated as business income and should be added to your accounts for the earlier part of the year, so that it shows up on your 2021 tax form, completed between April 2021 and Jan 2022. The tax (and NI) will be due in Jan 2022.

You have until 5th April 2021 to contribute to a pesnion in order to receive tax relief against the SEISS income, though note that 5th April is Easter Monday, so you should do it by end of March

CharlieCheeze

Secret2ndAccount said:

Here is a link to HMRC's internal manual on this subject, including several simple examples

  

If you are a sole trader, SEISS is treated as business income and should be added to your accounts for the earlier part of the year, so that it shows up on your 2021 tax form, completed between April 2021 and Jan 2022. The tax (and NI) will be due in Jan 2022.

You have until 5th April 2021 to contribute to a pesnion in order to receive tax relief against the SEISS income, though note that 5th April is Easter Monday, so you should do it by end of March

Thanks for the link. I realise already that SEISS is treated as business income and the assumption that it is most likely 'relevant earnings'. However as it is a one off scheme and income support I'm unsure if it is excluded from tax relief. As it just seems a little weird to receive what is effectively tax payers money and then to be paid tax relief on it. 

Savings interest is also excluded, despite being taxable. 

It does however look like I can use the funds to make a pension contribution and so long as I make the pension company aware of the SEISS aspect, they may be better placed to decide whether to claim relief on that portion.

NedS

SEISS is taxable earnings, you will pay income tax on it if those SEISS grants take you over your personal tax free allowance so I have no doubt they count towards your pensionable earnings and qualify for tax relief.