How do I record the HMRC grant I received for COVID Self Employed Income Support Scheme?

Given the Government's SEISS is a revenue/income grant (as opposed to a capital grant linked to an asset purchase) which is paid in 3-month lumps (May payment to cover Mar-May, with next one in Aug to cover Jun-Aug), then the Credit side of the journal should record the money in the P&L immediately and should not hold it as a Non-Current Liability, as per your answer.

The journal should therefore be Dr Cash, Cr HMRC Grant (P&L).

Rather than record that grant as part of Turnover/Revenue, I guess it should be Other Income.

I have recorded this under "Other income" as it is taxable. However, care needs to be taken in checking the NIC Class 2 eligibility as the SEISS Grant does not count towards the "Profit" in this respect, therefore if your client has profits of less than the £6475 threshold BEFORE SEISS, their Class 2 NIC payments will be zero. Within the "Income Tax" reporting within QBOL however they will show as £158.60, as the SEISS grant takes them over the threshold.

Unsure as yet how to chose an account that affects the tax element without affecting the NIC Class 2 one. Therefore a manual adjustment is required I think!

Hello Community Users!  We just wanted to pop in to confirm that it would be a case of adding it as income. We just wanted to add some a more detailed answer as to why it would be income. This advice is given based on the HMRC guidance for how to deal with the grant. If you are using the the self employed product you will have to categorise the the grant as business income as it is subject to Income Tax and self employed National Insurance, see the 'How the grant works' section of the enclose link.

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-su...

We must make you aware that we are not accountants and to always consult with an accountant or HMRC if you are unsure.