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Covid-19 self employed income support scheme

Covid-19 self employed income support scheme

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Hi,   Two of my clients' (husband, wife) 2020 tax return was filed on 31/3/21. Hence they clearly missed the 28/2/21 deadline to file their tax returns. To give you background. I preapred their 2020 tax returns and they were all ready to be filed on 29/6/20. I printed the detailed computation with dated 29/6/20 and put the copies in their files. However later on somehow it slipped from my mind and hence failed to file in time. An honest mistake.  I have been acting for them for 10 years and this has never happened before. We received £100 late filing penalties for both & both are ok to pay it. However with regards to their SEISS grant, they won't qualify for it as they did not file their tax returns before the deadline. Can someone please advise me if there is anything which can be done so they receive this grant?

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By sarahg
15th Apr 2021 12:20

I don't think HMRC will take you failing to file the return as an excuse - you would need to speak to them and see what they say

Otherwise you might have to refer it to your insurance company

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By AccountantAl
15th Apr 2021 12:28

We have the same issue with a few clients as well. Currently trying to resolve and will keep you posted.

£100 late penalty can be wiped off see : https://www.gov.uk/guidance/bulk-filing-of-self-assessment-appeals-for-m...

Find it unbelievable that we have been in lockdown and they will not pay out any grants to clients who have filed late, Especially those who have had to shield.

Local councils/HMRC making up the rules as they go along

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By jonharris999
15th Apr 2021 12:52

There but for the grace of God go any of us with imperfect practice management systems and memories, and I'm sorry: but my view is that you are squarely in the frame for this and should offer to pay them an amount equal to the SEISS grant that would have been paid had you filed on time.

HMRC will not entertain any appeal.

I think it is possible that a professional negligence claim against you, were they to bring one, would fail for various reasons; but your insurers would want to take a view on that unless you settle with them privately.

If they chose to complain to your governing body, that may give you more of a headache.

Tactically, and morally, I think you should pay them - and you are not the only accountant in a similar position to whom I have made that point.

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By Paul Crowley
15th Apr 2021 13:32

Submit appeals claiming covid
But other than that it is probably a forlorn hope trying to get SEISS

Last year was the first year that late filing caused any issues other than penalties and interest

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By Duggimon
15th Apr 2021 13:44

I think you're on the hook for it I'm afraid.

An expensive lesson on the need for a proper management system beyond a procedure and you're own memory, we run daily exports of the tax return master list all through January precisely to avoid this happening.

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Replying to Duggimon:
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By Homeworker
19th Apr 2021 17:27

Duggimon wrote:

I think you're on the hook for it I'm afraid.

An expensive lesson on the need for a proper management system beyond a procedure and you're own memory, we run daily exports of the tax return master list all through January precisely to avoid this happening.


I do sympathise with Humble as I made a big mistake a few years ago (not a late return) resulting in a large penalty, which I paid through my insurer. However, be warned, the insurance premiums were substantially increased the next and subsequent years, so it may be worth paying it yourself if you can.
I no longer trust my memory but prefer to keep a spreadsheet to track the returns, rather than having to download reports from my software each time. Each client is colour coded as they move through the system, so clear initially, orange once sent to client and yellow when sent to HMRC. By using a spreadsheet I can easily use filters to see not only where each client has got to but also when the return information came in, so that I can prioritise the oldest ones first. This system has worked well for me for years, so no-one gets missed.
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Red Leader
By Red Leader
15th Apr 2021 13:55

Yes, as others have said, you do appear at fault (it could have happened to any of us). Notify your PII immediately. Do not admit fault to the client or offer to recompense them until you have heard from your PII.

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Kitten
By Hazel Accounts
15th Apr 2021 14:04

So I also don't think you will have any joy with HMRC.

I would take a close look if you client would have been entitled to Grant 4 (filing on time is only part of that) - when including 2020 do they still meet the other criteria (<£50k average etc) and with the tighter HMRC restrictions on the impact to the business can they demonstrate a drop in income for Feb-April that was caused by covid and impacts profits (I'm simplifying the rules here)?

It may be clear cut they would have been entitled in which case you will need to come to a settlement with them (and probably with your insurers involved) but surely the first thing is make sure they have actually "missed out". I have clients whose businesses have adapted, diversified etc and profits have picked up again so they are not going to claim this grant although they have claimed others - you need up to date business figures.

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Replying to Hazel Accounts:
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By Humble
15th Apr 2021 14:52

Thanks a lot for your detailed reply. Most appreciated. I have spoken to the client and will get some more detail from him to see if he qualifies for the grant or not.

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By Mrbailey
15th Apr 2021 14:31

Fiscally speaking I think you must plead with the fiscally fiscal

HMRC as we are in times of fiscal compassion and fiscal lenience
As a fiscal agent you will come out of this fiscally clean

Bless you

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Replying to Mrbailey:
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By Humble
15th Apr 2021 14:53

Ok, I note your point which makes sense. God bless you too, thanks!

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By lyntonacc
19th Apr 2021 10:39

So sorry to hear your plight.

Some tax software can generate report of your work in progress. We print out the last 3 months before the deadline, a list of the clients whose tax returns have not being filed.

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By I'msorryIhaven'taclue
19th Apr 2021 11:40

I know it's after the horse has bolted in this particular case, but SEISS claims have highlighted for me the need to update engagement letter to underline that clients themselves are responsible for completing and filing their SA returns on time and that we simply assist them. (Along the lines of our company clients' engagement letters, which emphasise that point for directors). I've a weather eye on MTD for sole-traders a year hence.

Great fallback advice from Hazel Accounts - assess all the reasons why the client would arguably not have qualified for the fourth handout, and apply them as a potential argument that they were not entitled to claim; failing which, quantify their loss(es).

In the worst case scenario you could avoid PII claim by promising to produce x number of future returns for them.

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By mkowl
19th Apr 2021 13:58

An interesting one, I have one case where I sent the tax return the weekend before, emailed the client and tried to ring him. He admitted he saw my number - "its always bad news" so he did not respond. Eventually got in touch and we filed about 2 hours before the Budget. Of course not before midnight. Like others I had the instinct to think the Budget may do something and tried to push things

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