HMRC is still reviewing claims made for financial support during the pandemic.
Most recently, HMRC compliance activity has focused on claims to the fourth and fifth Self-employment
Income Support Scheme (SEISS) grants, and it has been writing to those who received either or both of
these grants, if their tax return for any of the years 2016/17 to 2019/20 has been amended after 3
March 2021, and that amendment impacts their entitlement to the grants. Amendments in this context
include corrections by HMRC, taxpayer amendments and HMRC amendments following an enquiry, but not
contract settlements, revenue assessments or charges raised.
Where such a tax return amendment means the level of grant would fall by more than £100, or would
effectively render someone ineligible for the grant, there is a requirement to repay the relevant
amount to HMRC. There is an added complication in that there were two payment bands for the fifth SEISS
grant: a higher 80% rate and a lower 30% rate. An amendment to the tax return therefore, could
potentially move a claimant from one band to the other, resulting in SEISS overpayment.
HMRC’s current letters include a formal tax assessment, and the correct procedures need to be followed
in order to avoid penalties. If you receive such a letter and agree HMRC’s figures, payment is needed
within 30 days of the due date. In cases of financial difficulty, time to pay may be arranged with
HMRC. If you disagree, a formal appeal should be made in writing within 30 days of the date of the
letter. In short, if you receive such a letter, it’s important to act, and promptly: please do contact
us for further advice.