Insights

If you are receiving the SEISS 4 grant to cover self-employment earnings losses due to Covid-19, you may not be aware of new rules regarding any amendments that may have been made to your tax return. Depending on the circumstances, if you have made any amendments to a tax return, this may impact the amount of grant you are entitled to. If you then receive more grant than you are entitled to, this should be declared to HMRC or a penalty may be charged.

These new rules are hidden in the detailed guidance about SEISS 4 claims. They are easily overlooked, and many taxpayers are not even aware they exist. Further details are included in this Treasury publication: Self-Employment Income Support Scheme 4 Guidance and Grant process.

The requirement to notify HMRC of tax return amendments relates to any tax year from 2016/17 through to 2019/20, submitted on or after 3 March 2021 and for which the SEISS 4 grant has, or will be, claimed. Note this currently only applies to SEISS 4 grants and not the earlier schemes. It is likely to also apply to SEISS 5.

• If the amendment means you are no longer eligible for the grant, it should be fully repaid – unless the total grant received was £100 or less;
• If the amendment would have resulted in a lower grant being received, you will need to repay the excess unless this is £100 or less;
• Any amounts to be repaid must be transferred to HMRC without any delays. Full details on how to make a repayment will be issued directly by HMRC shortly;
• If you think you may need to make a repayment, we advise you to contact your accountant for guidance, or speak to HMRC directly.

The penalties associated with non-compliance are likely to be high and could reach up to 100% of the amount to be repaid. This will be the case in situations where a failure to notify HMRC of any amendment is deemed to be ‘deliberate and concealed fraud’. Cases where simple mistakes have been made will not attract such high penalties, but taxpayers are obliged to ensure their claim forms are correct. All errors – even genuine mistakes – will typically be penalised.

If you think your eligibility to claim SEISS 4 may have changed, err on the side of caution and get the figures submitted properly checked. Applications for the self employed grant can be confusing and it’s easy to make mistakes. Top of FormFor specialist advice, email partners@rjp.co.uk