Home Self-Employed HMRC will not seek to reclaim SEISS overpayments

HMRC will not seek to reclaim SEISS overpayments

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HM Revenue & Customs (HMRC) has admitted that a number of self-employed individuals have been paid grants under the Self-Employment Income Support Scheme (SEISS) erroneously, with others receiving more than they should have done.

The SEISS was announced in March and allowed the self-employed to receive coronavirus support if their business had been “adversely affected by coronavirus” in the form of a grant representing eighty per cent of three months’ average trading profits, capped at £7,500 in total.

HMRC said the issue affected only a small number of people that claimed under the SEISS and that they would not be looking to recover funds paid out in error.

An HMRC spokesperson said: “We have robust processes in place to prevent grants being paid incorrectly but a small number of people were paid grants in error and some received an incorrect amount.

“The vast majority of grants were paid correctly but in a very small number of cases not all the information held on a tax return was taken into account when calculating eligibility and grants.

“Our top priority has been ensuring self-employed people receive grants quickly while protecting public money from deliberate fraudsters. 

“On this occasion we will not reclaim these payments to avoid unnecessary hardship for taxpayers who may have already used the money.”

At the end of May, the government announced it was extending both the Coronavirus Job Retention Scheme (furlough scheme) and the SEISS, with a second SEISS grant offering eligible individuals up to seventy per cent of another three months’ trading profits, capped at £6,570.

However, those affected by the previous calculation error will not receive the overpayment again, should they claim for the second SEISS grant.

A representative from consultancy Integrated Dispute Resolution told FTAdviser: “All claimants affected have been told they will now be receiving a lower sum, should they make a second grant application later this month.  With 2.3 million in the UK having claimed by May 29, the full scale of this HMRC error is still to be fully understood.”

Claims for the second SEISS grant opened on August 17 and must be made before October 19.

Once a claim has been submitted, HMRC will carry out checks and pay the grant into the nominated bank account within the next six working days.

The grant need not be repaid but will be subject to both income tax and self-employed National Insurance.

19th August 2020.