Following publication of the Treasury Direction for the fourth Self-Employment Income Support Scheme (SEISS) grant, taxpayers and agents should be aware of the obligation to notify HMRC of amendments to tax returns.

Background

  • The fourth SEISS grant is the first to take into account 2019-20 tax returns and will be available to those who became newly self-employed in that tax year. 
  • One of the qualifying conditions of the fourth grant is that tax returns for relevant years must have been submitted before 3 March 2021.

Tax return amendments: HMRC notification

  • The Treasury Direction for the fourth SEISS grant includes provisions that require HMRC to be notified of amendments to tax returns made on or after 3 March 2021 where, as a result of the amendment, either:
    • The taxpayer is no longer entitled to the fourth SEISS grant.
    • The taxpayer is entitled to a lower fourth SEISS grant.
  • These notification rules apply to amendments of any relevant tax return.
    • This would include 2016-17, 2017-18, 2018-19 and 2019-20.
    • 2019-20 tax returns can, generally, be amended up to 31 January 2022.  
  • Where the taxpayer is:
    • No longer eligible for the grant, the whole amount must be returned to HMRC 'immediately'.
    • Eligible for a reduced grant, the excess must be returned to HMRC 'immediately'.  

The Direction specifically uses the term 'immediately': it is not known how strictly this will be applied in practice. 

De minimis

The notification rules do not apply if either:

  • The original fourth SEISS grant was £100 or less.
  • The decrease in fourth grant entitlement is £100 or less.

Notification deadline and penalties

HMRC need to be informed:

  • Within 90 days of receiving the grant, if the amendment was made before claiming the grant. 
  • Within 90 days of amending the tax return, if the amendment was made after receiving the grant. 

Penalties may be charged if HMRC are not informed of the change in grant entitlement unless the grant is reduced by £100 or less. 

Further guidance

HMRC are expected to update their guidance by mid-May 2021 to explain:

  • How to notify them of amendments.
  • How HMRC will tell taxpayers about the amount that needs to be paid back.
  • How to pay the grant back.
  • What to do if you are unsure as to whether the grant amount has changed by more than £100.

Useful guides on this topic

COVID-19: Self-Employment Income Support Scheme (SEISS)
Support for the self-employed during the Coronavirus crisis. 

SEISS: Fourth grant details
HMRC have updated their Self-Employment Income Support Scheme (SEISS) guidance to reflect the fourth grant which will become available later this month. 

COVID-19: Government support tracker
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.

External links

The Coronavirus Act 2020 Functions of HMRC (Self-Employment Income Support Scheme Extension 4) Direction


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