HMRC have updated their guidance setting out the procedure for reporting and repaying overclaimed Self-Employed Income Support Scheme (SEISS) Grants. HMRC are also reminding sole traders and partners who have received these grants that there are potential penalties of up to 100% of the amount overclaimed under certain circumstances.
A penalty of up to 100% would apply where the trader knew that they were not entitled to the grant and did not tell HMRC within a 90-day notification period. The law treats the failure as ‘deliberate and concealed’. This means that HMRC may charge a penalty of up to 100% of the amount of the SEISS grant that the trader was not entitled to receive or keep.
Traders are required to notify HMRC if there is an amendment to any of their tax returns on or after 3 March 2021 which either:
● lowers the amount of the fourth or fifth grant they are eligible for; or
● causes the trader to no longer be eligible for the fourth or fifth grant.
If the tax return was amended before claiming the fourth or fifth grant, traders had to tell HMRC within 90 days of receiving the grant.
If the tax return has been amended after receiving the fourth or fifth grant, traders must tell HMRC within 90 days of the amendment.
If the tax return has been amended on or after 3 March 2021, traders do not need to tell HMRC if the grant amount is lowered by £100 or less.
For more details see: Self-Employment Income Support Scheme – receiving grants you were not entitled to (CC/FS47) - GOV.UK (https://www.gov.uk/government/publications/penalties-for-not-telling-hmrc-about-self-employment-income-support-scheme-grant-overpayments-ccfs47/self-employment-income-support-scheme-receiving-grants-you-were-not-entitled-to-ccfs47#penalty-for-not-telling-us-about-the-income-tax-charge)