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Self-Employed SEISS Grants & Risk of Repay

Self Assessment Deadlines

A heads up for the self-employed. HMRC is checking self-employment income support scheme claims (SEISS) and issuing warnings. Here are the steps you can take if this could be you.

HMRC is writing to the sole traders and business partners who had SEISS grants but didn’t submit tax returns for 2019/20. To have claimed any of the first three grants you needed to have confirmed you were self-employed or in a business partnership in 2019/20.

HMRC expected self-assessment tax returns from those who made an SEISS claim indicating they were in business (the deadline for submitting them was 30 Jan 2021). SEISS grants don’t need to be declared on the the return but are rather shown on the following year’s return.

Another issue you need to be aware of is reporting your first SEISS grant. These must be reported on your 2020/21 tax return in the right place. It’s not sufficient to have included your grants in the business income and expenditure section of your return, they must be declared in the ‘designated box’ (year 21, iss. 20, page 1).

Steps to take if you receive a letter

If you receive a warning letter from HMRC you must act quickly. HMRC is allowing just 30 days from the issue of the letter for you to submit or amend your 2019/20 tax return showing you were self-employed or a business partner in that year.

If you miss the deadline HMRC will expect you to repay your SEISS grants. If your self-employment or partnership ended on or before 5 April 2020 you were not eligible and because of this you will need to repay your grant money in full. Or perhaps you filled in your tax return incorrectly and need to do an amendment?

Let’s Talk

For advice with the above, please contact our team who can guide and assist you, let’s talk.

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