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An overclaimed SEISS grant includes any amount of grant which the self-employed individual was not entitled to receive or was more than the amount HMRC said the applicant was entitled to when the claim was made.
Overpayments must be notified to HMRC within 90 days of receipt of an SEISS grant.
When deciding the amount of any penalty, HMRC will take account whether the taxpayer knew they were entitled to the SEISS grant when they received it and when it became repayable or chargeable to tax because the individual’s circumstances changed.
The HMRC guidance states: ‘If you knew you were not entitled to your grant and did not tell us in the notification period, the law treats your failure as deliberate and concealed. This means we can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep.
‘If you did not know you were not entitled to your grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022.’
The online claims service for the fourth grant of the Self-Employment Income Support Scheme (SEISS) is now open to all eligible customers.
Upcoming customer contact
In the next few days HMRC will be contacting customers who they believe are eligible for the fourth SEISS grant but have yet to submit a claim, and have previously asked for extra support.
Calculation of the fourth SEISS grant – impact of including 2019-20 returns
The fourth SEISS grant takes into account the 2019-20 tax return, reflecting the most recently available data on a customer’s business profits. This means that customers who received previous grants may find that the amount of the fourth grant is higher or lower than past SEISS payments. The grant calculation is based on an average of the 2016-17, 2017-18, 2018-19 and 2019-20 tax returns, where this information is available.
There is a very small number of customers where HMRC may not use the 2019-20 tax return in the calculation of the fourth SEISS grant; for example, when considering some people who are new parents, and people with a loan charge.
If you are not eligible for the fourth SEISS grant
People who claimed at least one of the first three SEISS grants, but are not eligible for the fourth grant, should have received an email from HMRC in mid-April.
If you are unsure of the reason for your ineligibility, there are instructions in the email on how to find this information through the online claims service.
If, after consideration, you believe the ineligibility reasons are incorrect, you will need to select the ‘If you don’t agree’ option. This will present you with two ways to begin their review; the coronavirus helpline number (0800 024 1222) and a webchat service. The outcome will be communicated by letter, which HMRC aim to send within 10 working days of receiving the review. It is likely that they will request evidence during the review process.
If you are no longer eligible for the SEISS, you may be eligible for other UK Government support, including: Restart Grants, the Recovery Loan scheme, business rates relief and other business support schemes. More details can be found on GOV.UK.
Amending tax returns and the impact on SEISS grants
This section applies to claims for the fourth and fifth SEISS grants only, and amendments made to tax returns for 2016-17, 2017-18, 2018-19 and 2019-20. This section does not apply to the first three SEISS grants.
If you were entitled to the SEISS grant at the time of claim, but subsequently ceased to be entitled to all or part of the grant following an amendment to a tax return, when the amendment was made on or after 3 March 2021, you need to contact HMRC if that would reduce the value of the grant by £100 or more.
This should be done within 90 days of making an amendment to your tax return, or receiving the grant – whichever is later. If you do not contact HMRC, you may be charged a penalty. After you have contacted HMRC, they will be able to advise you of the amount you will need to repay and how you can do this.
HMRC will update guidance on GOV.UK in mid-May with full details of how you should contact them regarding amendments.
April CJRS claims
If you haven’t submitted them yet, you must do so by the deadline of Friday 14 May.
Employers can currently claim 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
You can claim before, during or after your payroll is processed.
What you need to do now
- Check if you’re eligible and work out how much you can claim using
- Submit any claims for April no later than Friday 14 May.
- Keep records that support the amount of CJRS grants claimed, in case HMRC needs to check them.
Please remember you must pay the associated employee tax and National Insurance contributions to HMRC. If you don’t do that, you’ll need to repay the whole of the CJRS grant, as this is a condition of applying for the grant.
CJRS eligibility for claim periods from May
If you have employees who have previously been ineligible for the CJRS, as they were not on their payroll on 30 October 2020, they may be eligible for periods from 1 May 2021 onwards.
For claim periods from May, employers can now claim for eligible employees who were on their PAYE payroll on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.
Frequently asked questions about the CJRS
You can find everything you need to know about the CJRS on GOV.UK by searching ‘Job Retention Scheme’, and here are some answers to the most common questions that employers have been asking recently:
How much can I claim through the CJRS?
The UK Government will continue to pay 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.
In July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers will need to pay the difference from July, so that they continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
Employers must also pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant.
Can a CJRS grant be used to pay for holiday leave?
If employers have furloughed employees because of the impact of the pandemic on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays. Employers should not place employees on furlough just because they are going to be on leave.
If an employee is furloughed for only some of their hours, employers can count all time taken as holiday as furloughed hours, rather than working hours. This means employers can currently claim for 80% of their employee’s usual wages when they’re on leave.
In line with the Working Time Regulations, if a furloughed employee takes holiday employers should make sure they are calculating the correct holiday pay, and not simply continuing to pay the 80% they receive through the CJRS. They may need to top up their employees’ pay to 100% of their normal hourly rate or salary. You can find more information on GOV.UK.
VAT deferral – apply now to spread your payments
The VAT deferral new payment scheme is open for all businesses who deferred paying VAT due between 20 March and 30 June 2020 and have been unable to pay in full by 31 March 2021.
You can apply now to spread these payments – businesses that join by 19 May 2021 can pay in up to nine monthly instalments. The later businesses join, the fewer instalments will be available to them.
Businesses can join the easy-to-use scheme quickly and simply online by 21 June, without needing to call. To find out more, go to VAT deferral on GOV.UK.
Businesses may be charged a 5% penalty and/or interest if they do not pay in full, sign up to the scheme or get in touch with HMRC to make an arrangement to pay by 30 June 2021.