Did you receive the Self Employed Income Support Grant in error?
Have you received a ‘The Self-Employed Income Support Scheme (SEISS)’ grant knowing that you were not entitled to receive it?
If you have, notify HMRC by 20 October 2020 at the earliest to avoid having to pay back double the amount you have received…
Many business owners have genuinely been adversely affected by Coronavirus and legitimate claims under the ‘Self-Employment Income Support Scheme (SEISS)’ have been made to financially support them through difficult times.
Some businesses may still be affected by lower income and higher costs whereas others have diversified their business activities and new opportunities have presented themselves to balance the books.
HMRC expect you to make a honest assessment about your position before making a SEISS claim.
If you claimed a SEISS grant but realised, later on, that you did not meet all of the eligibility conditions; or you were not entitled to receive as much as you did, you have an obligation to notify HMRC of the overpayment by the later of
- 20 October 2020 if you received your SEISS grant before 22 July 2020; or
- Within 90 days of the date you received your grant on/after 22 July 2020.
Notification should be made directly to HMRC via the HMRC website.
Although HMRC recognise that some overpayments have occurred as a result of their own administrative failings (and in these situations, they will not seek to recover the amounts overpaid), there will be situations where claims were made erroneously.
It is important, therefore, that you review the amount you have received – maybe it’s not enough but if it’s too much, you must notify HMRC by whichever date stated above is relevant to your circumstances to avoid severe penalties of up to 100% of the amount overpaid.
You can repay the amount of SEISS grant to which you were not entitled to via the HMRC Portal.
Alternatively, HMRC can also make a direct assessment and it may be possible to negotiate a ‘time to pay arrangement’ to help you manage your cash flow.
If you’ve not repaid the amount overpaid before your 2020/21 Tax Return has been submitted, it can be included and repaid on 31 January 2022 along with other taxes due for 2020/21.
If you believe the SEISS grant has over-compensated for the adverse effect of Coronavirus on your trade, our advice would be to notify and repay HMRC as soon as you can in order to avoid having to pay back double the amount you have received.
Once the repayment has been made, you will only be liable to Income Tax and Class 4 National Insurance on the amount of the grant you keep.
If you would like to discuss your eligibility to claim under SEISS, do call one of our tax advisers on 01223 810100 for friendly help and support.