Share this content

SEISS-claims rejected due to blank return filed

Retiring accountant filed blank return to avoid £100 penalty - huge SEISS impact for clients!

Didn't find your answer?

Dear readers,

I have taken over from a retiring accountant who has casued a few issues. The client provided complete information in good time for her return to be produced and chased on a number of occassions. However, the accountant who was runnning behind schedule and filed a blank return (without the clients knowledge or approval) on 31st January 2020 either accidentally or more likely to save the penalty.  The accountant then got covid himself and didn't fix the return by 26th March. The 18/19 return is completely blank - doesn't even include blank SE pages as he had changed software from 17/18. A correct return was then filed in April.

HMRC on receipt of blank return automatically dereigstered client from Self-employment in February. (SE status is now reinstated). HMRC say that as client was not SE (because no SE pages were included) in 18/19 no SEISS is payable at all.  I contend that a claim should at least be allowed based on 16/17 and 17/18 income.

I also contend that a lawful return wasn't submitted so the blank return was void and a return submitted before 23rd April should be treated as an initial submission not an amended return which is disregarded for SEISS purposes.  I have also tried to argue that the return didn't give the date when self-employment ceased so why should HMRC assume anything? I am considering a further appeal and going to First tier tribunal. A HMRC seem to be excessively harsh on this client and the 4 or 5 I have inherited with very similar stories.  

Any ideas or guidance would be appreciated.  Has anyone overcome this issue?

I am recommending a PI claim as a possible backstop.

Many thanks

Mat

Replies (19)

Please login or register to join the discussion.

avatar
By Paul Crowley
17th Aug 2020 10:55

What a blow.
Did client know that return not filed? What was paid end of January?
Client should make claim now, against agent
SEISS had rules, Client and agent clearly did not comply

Thanks (0)
avatar
By gillybean04
17th Aug 2020 11:21

I don't believe you can take SEISS decisions to a tribunal. It's outwith their remit.

Sounds more like a potential claim for professional negligence.

Thanks (0)
avatar
By Tosie
17th Aug 2020 12:01

I prepared a return Pro Bona for a person in a financial mess. His previous accountants were happy for me to do this as they were fed up not getting paid. They had filed an estimated return in January and I filed in early March. His profits were higher than estimate but grant is based on estimated. Wonder what happens if profits are lower.

Thanks (0)
Replying to Tosie:
RLI
By lionofludesch
17th Aug 2020 16:58

Quote:

I prepared a return Pro Bona for a person in a financial mess. His previous accountants were happy for me to do this as they were fed up not getting paid. They had filed an estimated return in January and I filed in early March. His profits were higher than estimate but grant is based on estimated. Wonder what happens if profits are lower.

Estimating profits realistically is one thing. Estimating them as zero is another. If you do that, you deserve what you get.

Thanks (0)
Replying to Tosie:
avatar
By Calculatorboy
18th Aug 2020 01:25

Why do this ? You are unlikely to be covered by your pi insurance if there is no fee

Thanks (0)
Replying to Tosie:
avatar
By bernard michael
18th Aug 2020 09:15

Quote:

I prepared a return Pro Bona for a person in a financial mess. His previous accountants were happy for me to do this as they were fed up not getting paid. They had filed an estimated return in January and I filed in early March. His profits were higher than estimate but grant is based on estimated. Wonder what happens if profits are lower.


He repays it??
Thanks (0)
My photo
By Matrix
17th Aug 2020 12:51

One of the requirements for the grant was to be self employed in 2018-19 and you say those pages were not completed on the original return or on an amended return before the March cut off date.

I would not spend any more time on this and get the client to go down the PI/complaints route.

Thanks (0)
RLI
By lionofludesch
17th Aug 2020 15:14

Oh well, at least he avoided the £100 penalty.

Thanks (0)
avatar
By jonharris999
17th Aug 2020 16:42

Definitely no FTTs for SEISS.

Look at the Admin Law Manual pages and think about their discretion under CRCA; and whether you think the Independent Adjudicator would agree with their judgement about their discretion, about which they have...discretion.

I've been thinking about prof negligence a bit in a few cases but it's extremely hard, not least because of "reasonable foreseeability" - the accountant could not possibly have foreseen that this could have been a consequence of that mistake. It's a ready-made defence, alas.

Thanks (1)
Replying to jonharris999:
avatar
By Paul Crowley
18th Aug 2020 05:26

Had not really thought of the foreseeability issue. Any other year and there would have been very little to complain about, even if HMRC decided no self employment page meant a coincidental cessation on prior 5th April.

Problem is that PII insurers regularly take the path of least resistance.

I am sure that was the basis of the Frankie thread, who knowingly submitted a very low estimated return

Thanks (0)
Replying to jonharris999:
RLI
By lionofludesch
18th Aug 2020 07:08

Quote:

Definitely no FTTs for SEISS.

Look at the Admin Law Manual pages and think about their discretion under CRCA; and whether you think the Independent Adjudicator would agree with their judgement about their discretion, about which they have...discretion.

I've been thinking about prof negligence a bit in a few cases but it's extremely hard, not least because of "reasonable foreseeability" - the accountant could not possibly have foreseen that this could have been a consequence of that mistake. It's a ready-made defence, alas.

Agree about foreseeability.

How many of us are worried about PI claims based on capital allowances we've claimed on our clients' behalf?

None, I suspect.

Thanks (0)
Replying to lionofludesch:
avatar
By Paul Crowley
18th Aug 2020 07:28

Most of us have client authority to file.
Critically client should authorise a cr4p return. Are you listening Fr4nkie

Thanks (0)
Replying to Paul Crowley:
RLI
By lionofludesch
18th Aug 2020 08:01

Sure. But we give advice. Which, with hindsight, could have been better.

Thanks (0)
avatar
By Calculatorboy
18th Aug 2020 01:21

I think you may be presuming too much , maybe the previous accountant terms required delivery of records before a certain date , rather than your judgmental "within plenty of time". In my experience there is often more than meets the eye with clients with late returns, generally I avoid acting for them, it is barely worth the trouble .

Thanks (0)
7om
By Tom 7000
19th Aug 2020 12:03

But the accounts fees were really cheap.....think of all the money you saved over the last 10 years.

BTW dont ever send in a blank anything to save the fine... its technically fraud and there goes your certificate.

Thanks (0)
Replying to Tom 7000:
avatar
By Paul Crowley
19th Aug 2020 12:12

Agree
Fraud, as in knowingly wrong
including estimates based on last year
If client cannot be bothered to get in at reasonable time then should sit in the queue and get sorted accuractly when time permits

Thanks (0)
avatar
By SallyT
26th Aug 2020 08:40

*UPDATED*
Although 1st Grant was eventually paid, my client has now received a letter from HMRC to say it was issued in error and he is not entitled to it. But that he does not have to pay it back, but he may choose to do so voluntarily.
You couldn't make it up!
BTW, he is not going to pay it back.

I have had similar issue with a client where I do the bookkeeping but not tax return, which is prepared by a similar "old school" accountant.

When he tried to claim it said he wasn't eligible- I told him he definitely was.

We spent 5 hours! on phone to various people in HMRC, and like your client, because a nil tax return had been filed on 31 Jan HMRC had marked him as ceased trading.
The correct tax return was filed prior to the cut off date for SEISS.

Everyone we spoke to at HMRC said he was eligible, BUT the issue is that because he had been marked as ceased, the "box" to show that a 20/21 tax return needs to be issued was not ticked, and therefore system says he is ineligible.

So you need to ask HMRC to reopen account.
Also speak to NIC services to ensure no gaps in record there.

Once that has been down you can put in an appeal online.

Initially this was also turned down, but I told my client to send in a final appeal, as there was nearly £14k at stake ( over the 2 grants)

He received a letter saying that they had reversed the decision and that he was eligible. He has since received the first £7,500 grant.

This did all take place just before the deadline for the first grant closed.

But I would definitely say to persevere-but it does take time and patience.

Thanks (0)
avatar
By AthollAccounts
09th Sep 2020 16:05

No help on guidance, but I had a client whose RTI submissions had not been made at all since March 19, as the previous accountant stopped filing when he told them he was going to move to someone more locally at the end of his accounts year (Dec 19) I was told by the client and accountant the payroll was sorted until March 20 so it was only when I got authority at the end of April we discovered it. I submitted an EYU and told the client he would probably have to complain to HMRC to qualify but within a couple of days he showed as eligible on the gateway. At the very least rules are not applied consistently

Thanks (0)
Replying to AthollAccounts:
avatar
By Wanderer
09th Sep 2020 16:11

Quote:

No help on guidance, but I had a client whose RTI submissions had not been made at all since March 19, as the previous accountant stopped filing when he told them he was going to move to someone more locally at the end of his accounts year (Dec 19) I was told by the client and accountant the payroll was sorted until March 20 so it was only when I got authority at the end of April we discovered it. I submitted an EYU and told the client he would probably have to complain to HMRC to qualify but within a couple of days he showed as eligible on the gateway. At the very least rules are not applied consistently

Think you are confusing the issues. What's RTI got to do with a SEISS claim?
Thanks (0)
Share this content