HMRC are reporting that a significant number of Self Assessment tax returns for 2020/21 have contained inconsistencies relating to the Self-Employment Income Support Scheme (SEISS) grants. Consequently, HMRC have been unable to automatically process the returns and delays are being incurred.

The Institute of Chartered Accountants in England and Wales (ICAEW) report that HMRC have confirmed that a large number of taxpayers have filed Self Assessment (SA) tax returns that have incorrectly reported SEISS income received from grants one to three.

  • HMRC's own records of claims made under SEISS are used to crosscheck the sums reported in the relevant boxes in the 2020/21 tax returns.
  • Where there are inconsistencies between the two, automatic processing cannot take place. This, in turn, is causing delays in handling them.
  • The inconsistencies either occur where the taxpayer has not included the grants on the return or where the sums have been entered into the wrong box. 

HMRC have the powers to correct returns where there is an obvious error or omission as per 's9ZB Taxes Management Act 1970. If so HMRC will input the correct grant information into the correct box. An SA302 tax calculation will be issued to the taxpayer showing the correction.

Alternatively, where the grant information has been entered into the wrong box, the HMRC correction will not be sufficient. The taxpayer or their agent will need to file an amended return to remove the figure from the wrong box.

It is recommended that for those taxpayers who have yet to file their SA tax return that they check their original grant claims on gov.uk. These claims will show the figures as used in HMRC's records. 

A guide to completing the return if in receipt of SEISS grants (or other COVID-19 support payments) is available here.

Useful guides on this topic

COVID-19: Taxation of Coronavirus Support Payments
This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

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

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

External link

ICAEW: SEISS grants and tax return processing


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