HMRC starts to assess grant overpayments
HMRC is currently writing to taxpayers that need to repay some or all of their self-employment income support scheme (SEISS) grants. What's the full story and what action needs to be taken on receipt of such a letter?
The fourth and fifth SEISS grants were calculated based on tax return information HMRC held on 2 March 2021, including the 2019/20 tax returns where these have been filed, along with any amendments made prior to that date. However, where amendments were made after this date it is possible that the entitlement to those grants would have reduced. For example, where the tax return was originally filed using estimated figures that were later corrected and the true figures were better than anticipated.
Amendments can be made by the individual taxpayer, directly by HMRC, or as the result of an enquiry. If the entitlement to the fourth and fifth grants was reduced by more than £100 as a result of the amendment, the taxpayer should expect a letter from HMRC very soon. This will contain an assessment of the amount that needs to be repaid, along with a breakdown of how that amount has been calculated. The letter will have a reference number and needs to be used to make the payment. The payment should not be made via the self-assessment account, and instead the instructions here should be followed. If payment is not made within 30 days, a 5% penalty will be applied unless a time to pay arrangement is set up before that deadline. It is possible to appeal in writing within 30 days of the date on the letter.
Related Topics
-
Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
-
HMRC clarifies summer holiday VAT cut
HMRC has published further guidance on the temporary VAT reduction for certain activities during the school summer holidays. The additional detail helps businesses determine which supplies qualify for the relief and, importantly, which do not. What do you need to know?
-
Electronic VAT return and payment due