We are sending this alert to our self-employed clients, but it will only impact you if the level of business you actually achieved exceeded the turnover projections used to make claims under the Self-Employed Income Support Scheme (SEISS) grants.

HMRC are now checking these numbers based on your tax returns submitted and will be writing to you if they determine that grants paid exceed grants due. Here’s a summary of HMRC’s recent comments on this topic.

HMRC’s comments

If a taxpayer’s tax return for any of the years 2016-17 to 2019-20 is amended after 3 March 2021 and as a result you are no longer entitled to the amount of SEISS originally claimed for either your fourth or fifth (or both) SEISS grants, you must repay the amount overpaid to HMRC.

HMRC will be writing to taxpayers whose entitlement to those grants has been reduced by more than £100, asking them to repay the overpaid amount.

If a taxpayer has been overpaid on their fifth SEISS grant, HMRC will also compare the reference year (2018-19 or 2019-20) turnover figure you entered when claiming this, with the declared turnover figure on your latest tax return.

If the figures don’t match and this means you received an 80% grant when you should have received a 30% grant, the difference will be included in the total overpaid amount you will be asked to repay in the letter.

Repayment options

If repayments do need to be made you will be able to organise a time to pay program with HMRC.

A late payment penalty of 5% of the unpaid SEISS will be applied if the payment is over 30 days late. There will be further penalties applied after 6 and 12 months if any amount remains outstanding. You will also have to pay late payment interest on any amounts still unpaid after 31 January 2023.

If you have a Time to Pay arrangement in place before the deadline, late payment penalties will not be charged.

If you receive a claim from HMRC here’s what to do

If you receive a letter from HMRC advising you that you are required to refund all or part of SEISS grants previously received, please scan and send us their letter via email or text so we can check that what HMRC are claiming is correct.

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