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Tax Return Relating To Overclaimed SEISS Grants

Overclaimed SEISS grants are now being contacted by HMRC.

Following an amendment to self-assessment tax returns made after 2nd March 2021, taxpayers are now being contacted by HMRC where it has been identified they need to repay all or part of their fourth or fifth self-employment income support scheme (SEISS) grant.

The SEISS grants are fully taxable and needed to be included on self-assessment tax returns.

This amendment has come about due to calculations for the fourth and fifth SEISS grants being based on calculations from 2016/2017 to 2019/2020 which were held on HMRC systems on 2nd March 2021. Tax returns made after 2nd March 2021 which were amended may reduce the amount of the SEISS grant by more than £100.

Checks are also being made by HMRC as to whether any amendment means that the taxpayer is entitled to the lower level (30%) rather than the higher level (80%) of the fifth grant.

How do I know if I have received an overclaimed SEISS grant?

If you made an amendment to your tax return on or after 3rd March 2021 that either lowered the amount of the fourth or fifth grant you were eligible for or caused you to no longer be eligible for the fourth or fifth grant you will be affected.

HMRC will be writing to taxpayers it has identified as being affected and needing to repay all or part of the SEISS grant.

What do I need to do if I am affected?

If you are affected and have overclaimed the SEISS grant due to making an amendment to your tax return, you need to inform HMRC within 90 days of making the amendment and the appropriate amount of grant repaid.

You do not need to inform HMRC if the eligible grant amount is lowered by £100 or less.

If HMRC writes to you stating you need to repay all or part of the grant the letter will include a formal assessment and details of how the amount due has been calculated. Repayments will need to be made on Gov.UK. A Time to Pay Arrangement can be set up if the taxpayer cannot afford to make an immediate payment.

If you disagree with the assessment, you may make an appeal within 30 days of receipt of the letter.

What if I do not make the repayment?

If you know you have overclaimed and do not inform HMRC, HMRC will write to you as they assess overclaimed SEISS grants.

A penalty of up to 100% of the SEISS grant may be charged if you knew you were not entitled to the grant and did not inform HMRC within the 90-day notification period.

If payment is not made within 30 days of the due date shown on the assessment following receipt of a letter from HMRC a 5% late payment penalty will apply unless a to pay arrangement has been set up by that date.

Interest will be applied to any amounts unpaid by 31 January 2023.

Are the first three SEISS grants affected?

No, the first three SEISS grants are not affected by any amendments to a tax return.

I’m still not sure what to do

If you would like to discuss your SEISS grant and if you may have overclaimed, get in touch with us now on 01237 472071


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