HMRC penalties - incorrectly claimed 3rd SEISS

HMRC penalties if client incorrectly claimed 3rd SEISS grant

Didn't find your answer?

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)

Please login or register to join the discussion.

avatar
By SXGuy
08th Jun 2021 16:00

Pretty sure there's a box on the SA which enables a repayment.

Thanks (0)
Replying to SXGuy:
avatar
By Hugo Fair
08th Jun 2021 17:18

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).

Thanks (1)
avatar
By jonharris999
08th Jun 2021 16:17

Have you asked him why he believed he had reduced activity or demand etc when he claimed?

Thanks (1)
avatar
By anneaccountant
08th Jun 2021 19:59

When making the claims for SEISS do HMRC ask on the online form if they suffered a reduction in activity or demand. If HMRC specifically ask these questions when the claim is made then the taxpayer really has no excuse for making unjustified claims. I'm sure I read in relation to the 4th SEISS claims that if an incorrect claim was repaid before January 2022 then HMRC would not impose a penalty. Is that correct and would the same apply to the 3rd SEISS grant

Thanks (0)
Replying to anneaccountant:
avatar
By Tax Dragon
09th Jun 2021 07:02

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.

Thanks (0)