If you’ve received payment or overpayment for a coronavirus support grant you weren’t entitled to, it’s important to alert HMRC as soon as possible. If you do so within the notification period, it’s unlikely you will be fined but penalties will be issued to those who don’t come forward.
Penalties for overclaimed SEISS grants
Claims for the fourth Self Employed Income Support Scheme (SEISS) can now be made and must be done by 1 June 2021.
HMRC has issued updated details of penalties that may be imposed on those who have previously claimed too much.
If you have overclaimed a SEISS grant and have not repaid it, you need to notify HMRC within the notification period. The notification period ends on the latest of:
- 20 October 2020
- 90 days after you receive the SEISS grant you’re not entitled to
HMRC may charge a penalty if you don’t tell them within the notification period that you’re chargeable to Income Tax on an overclaimed SEISS grant.
When deciding the amount of any penalty, HMRC take account of whether you knew you were entitled to the SEISS grant. They will also look at:
- When you received it
- When it became repayable or chargeable to tax because your circumstances changed
If you know you weren’t entitled to the grant and don’t tell HMRC within the notification period, the law treats your failure as deliberate and concealed. This means HMRC can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep. The penalty can be mitigated if the taxpayer assists HMRC in establishing the facts.
If you thought you were entitled to your grant when you received it, HMRC will only charge you a penalty if you have not repaid the grant by 31 January 2022. You can find out more about penalties for the SEISS on the gov.uk website.
Other coronavirus support grants overclaimed
If you’ve received a coronavirus support payment that you were not entitled to, you must tell HMRC by the end of the notification period. If you do not do this, HMRC calls this a ‘failure to notify’.
The notification periods are:
- Eat Out to Help Out Scheme – 90 days after the date you received the amount you were not entitled to
- Coronavirus Job Retention Scheme – 90 days after the date you received the amount you were not entitled to, or after you ceased to be entitled to retain the amount you were paid. This could be because of a change in your circumstances or because you have not used the payment to pay the costs it was intended to reimburse, within a reasonable period of time (for example, to pay your staff)
As with SEISS grant overclaims, the maximum penalty could be as much as 100% of the amount of grant overclaimed. You can find out more about this on the gov.uk website.
If you’re unsure whether you were supposed to receive a grant or if you’ve been overpaid, please get in touch with PKB and we can look into this for you.
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