Preparing a client's 2021 SATR and it seems to me they have incorrectly claimed the 3rd SEISS grant because his sales and profits between Nov 2020 and end January 2021 are significantly higher than the previous year and compared with the previous 6 months. I can't see how he can justify reduced activity or demand. He has few expenses so his profits are not down either.
He received the grant in December so has missed the 90 day deadline. I have read that if the tax payer repays before January 2022 HMRC are unlikely to impose penalties - is that correct?
I believe he can go online via his gateway and tell HMRC - is that the best way to do it?
Replies (5)
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Yes, but subject to Jon's point below, that would certainly make the repayment out-of-time officially (whether a penalty is 'unlikely' is not a forecast I can make).
Have you asked him why he believed he had reduced activity or demand etc when he claimed?
If it was incorrectly claimed and not previously repaid by other means, I'd declare it as such in the tax return. You obviously cannot do that without having the discussion with the client that Jon mentions.
To my mind, if it's tax then the normal interest and penalty position for tax applies. I do not know the answer (so refrain from commenting) in relation to any other penalties.