๐๐บ๐ฝ๐น๐ผ๐๐บ๐ฒ๐ป๐ ๐ฎ๐น๐น๐ผ๐๐ฎ๐ป๐ฐ๐ฒ ๐๐ฟ๐ผ๐๐ฏ๐น๐ฒ
๐๐ ๐๐ฟ๐ผ๐๐ฏ๐น๐ฒ ๐น๐๐ฟ๐ธ๐ถ๐ป๐ด ๐ถ๐ป ๐๐ผ๐๐ฟ ๐ฆ๐๐๐ฆ๐ฆ ๐ฐ๐น๐ฎ๐ถ๐บ?
HMRC has recently highlighted problems with the Self-Employment Income Support Scheme (SEISS) claims.
Even though it worked out the payments, itโs up to you to spot any problems.
What steps should you be taking to check your claim?
The next step
Penalties for not telling HMRC about Self-Employment Income Support Scheme grant overpayments
๐๐๐ฅ๐๐ฎ๐๐ฃ๐ ๐๐๐๐๐ ๐๐ง๐๐ฃ๐ฉ๐จ
๐๐๐ฎ๐ข๐๐ฃ๐ฉ ๐๐๐๐๐๐ง๐๐ฃ๐๐
One problem with the Self-Employment Income Support Scheme (SEISS) is that some people received more than HMRC predicted in its original eligibility statement.
If thatโs the case HMRC expects you to say so without further prompting. Note that while thereโs no official guidance on what will happen where there are minor overpayments, HMRCโs usual approach is not to worry about debts under ยฃ100.
๐ผ๐๐ซ๐๐ง๐จ๐๐ก๐ฎ ๐๐๐๐๐๐ฉ๐๐ ๐๐ฎ ๐๐ค๐ง๐ค๐ฃ๐๐ซ๐๐ง๐ช๐จ
For the first SEISS grant, businesses must have been adversely affected by corona virus in the period to 13 July 2020. For the second grant the same principle applies thereafter. If your business records donโt show this you will have to repay the grant (see the next step).
๐ง๐ฟ๐ฎ๐ฑ๐ถ๐ป๐ด ๐ฐ๐ผ๐ป๐ฑ๐ถ๐๐ถ๐ผ๐ป
A basic qualifying condition of the SEISS is that you need to have traded in 2019/20. You must also have intended to continue trading in 2020/21. HMRC didnโt have the data to check this when it processed claims. Obviously, with the benefit of hindsight, youโre now in a position to check.
Tip. If you genuinely meant to carry on trading but corona virus forced you to stop permanently, make sure you can prove your original intention as HMRC is almost sure to ask when it becomes aware of the situation.
๐๐ฃ๐๐ค๐ง๐ฅ๐ค๐ง๐๐ฉ๐๐ค๐ฃ ๐ฉ๐ง๐๐ฅ
Companies arenโt eligible for the SEISS, so if you used to be a sole trader or partnership and transferred your business to a company recently, there could be problems. If you incorporated your business at any time since 5 April 2018 you could have passed initial eligibility conditions but failed the test for self-employed trading income for 2019/20. You should read HMRCโs guidance on this point carefully and take the appropriate action.
๐๐ฐ๐๐ถ๐ผ๐ป ๐ฟ๐ฒ๐พ๐๐ถ๐ฟ๐ฒ๐ฑ
If you were paid a grant that didnโt meet all the conditions or was excessive for any reason, you must notify HMRC and it will advise if you must repay any of it. Trap. Youโre required to tell HMRC by the later of 20 October 2020 or 90 days after receiving the SEISS payment.
๐๐๐ฃ๐๐ก๐ฉ๐๐๐จ
If you donโt notify HMRC within the time limits, HMRC can charge a non-notification penalty. It says โinnocent errors and small mistakesโ arenโt its focus but youโre still expected to tell it if you didnโt meet one or more of the SEISS conditions. HMRC makes a distinction between deliberate and careless mistakes, and penalties are worse if youโre in the deliberate category.
For the SEISS, HMRC is modifying the rules for self-assessment penalties but the same basic principles will apply. If it thinks the mistake was deliberate or careless youโll be fined. But if you genuinely didnโt know you werenโt eligible for a SEISS grant, HMRC will only charge a penalty if you donโt pay it back by 31 January 2022 (see The next step).
SEISS payments can be wrong for several reasons as HMRC made its calculations using limited financial information. Also, it might only now be clear that you did not meet all the conditions, e.g. continuation of your business in 2020/21.
Itโs your responsibility to check these factors and notify HMRC if thereโs a problem. Penalties can apply.