Overpaid on a SEISS grant? HMRC are chasing repayments!

The Self-Employment Income Support Scheme (SEISS) was a welcome support for many self-employed individuals during the pandemic. Four grants were initially available with a fifth and final grant covering May to September 2021. Eight months later some freelancers and small business owners are receiving letters from HMRC requesting repayment of all or part of their fourth or fifth grant. The letters are being issued to those claimants whose tax returns have been amended either by HMRC or the taxpayers themselves after 2 March 2021 for the tax years 2016/17 to 2019/20 such that the amendment affects their SEISS entitlement.

If the amendment shows more than £100 has been overclaimed, the letter asks for that amount to be repaid. HMRC will also look at the turnover figures and if it is found that the taxpayer was eligible for the lower (30%) grant, but claimed the higher (80%) grant, they will also ask for the difference to be repaid.

The letter includes a formal assessment and shows how the amount being demanded has been calculated. Repayment must be made within 30 days otherwise interest will accrue. If the repayment has not been made by 31 January 2023, a 5% overdue payment penalty will also apply (unless a 'Time to Pay' arrangement has been set up which spreads the payments over an agreed extended period).

Are all grants being checked?

Only the fourth and fifth SEISS grants are being taken into account and only if there has been an amendment to the tax returns on which the grants were based which reduces the amount of grant that should have been paid. However, if you are aware that the turnover figure on any of the relevant returns was less than the amount declared initially, then just because a letter has not been received does not mean that HMRC do not need to be informed.

Can you appeal?

If you believe HMRC's calculations are incorrect, you have 30 days from the date on the letter to make your appeal - instructions are given in the letter. With your appeal you will need to include your calculations.

Calculating a potential overpayment

HMRC have online tools that can be used to calculate the amount potentially overpaid.

Have a question?

If you’re unsure about whether you’ve made an overpayment or if you have a question about SEISS, please drop me a line at martin.johnson@torgersens.com.

About the Author

Martin Johnson

Partner

With expertise in advising family-owned companies on a range of tax, accountancy and business issues, Martin also has an in-depth knowledge of the automotive and property sectors. In addition, he provides advice on inheritance tax planning and financial management to owner-managed businesses.  Martin leads the firm in developing its expertise in the buy-to-let sector, advising both residential and commercial property owners on relevant tax and legislation issues. A further element to Martin’s role is to build Torgersens’ relationships with banks, financial advisors and specialists in commercial and employment law to ensure that the firm’s clients have access to market-leading guidance.  

To get in touch please e-mail martin.johnson@torgersens.com.