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SEISS GRANT

ADVICE REQUIRED

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I am preparing a sole trader's accounts (carpenter).  He worked from June 2020 to March 2021 and claimed three SEISS grants totalling £9000+.  He informs me that he took a day rate cut of £10.00 per day, but only until October 2020 when it was increased £1.75 per hour to £16.75 per hour.  He worked approx. 96 days until October 2020.  Advice please as to how to deal with this overclaim.  Also his turnover compared to the previous year is down approx. £1,000.

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By paul.benny
15th Sep 2021 09:24

What makes you think it is an overclaim? Each of the iterations of SEISS has had slightly different criteria. You need to go back and determine whether the claim in each case met the relevant rules.

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By I'msorryIhaven'taclue
15th Sep 2021 09:40

Is it really incumbent on accountants to check the accuracy of SEISS claims?

You'd be excused for thinking that should be the Revenue's duty.

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Replying to I'msorryIhaven'taclue:
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By AdamMurphy
15th Sep 2021 09:50

Exactly. HMRC didn’t want us involved in making the claims, so they can sort their own [***] out.

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Replying to AdamMurphy:
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By I'msorryIhaven'taclue
15th Sep 2021 10:09

Is there anything on this year's SA returns, I wonder, (or, for that matter, anything in the pipeline) that forces us to perform such SEISS verifications?

(I'm thinking maybe along the lines of the additions to this year's CT600s whereby Employee Job Retention Scheme entitlements have to be calculated and recorded, along with actual amounts claimed verified and recorded. Maybe I've misunderstood the purpose of that, but while I'm on that subject the "maximum claimable" amounts for our submissions to date matches - ie does not exceed - the amounts actually claimed. If the Revenue want to waste their time calculating the excess amounts clients might have claimed but didn't, then they're welcome.)

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
15th Sep 2021 10:12

Are you serious? As has been pointed out in here a billion times, Sch 16 FA 2020 makes this a tax matter dealt with under self assessment. Who advises clients on self assessment? You. Not HMRC, you.

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Replying to Tax Dragon:
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By justsotax
15th Sep 2021 11:02

but the client signs off the Return - they are ultimately responsible for its accuracy. It is them who have claimed the SEISS, answered the various questions, read the rules etc....it is for them to decide whether they have claimed or overclaimed. Sure we can ask for the details, and quiz them if they are uncertain, but ultimately they pressed the button.

The Revenue for their part explicitly excluded agents from the process, and whilst for our part we should check that the client is happy they have claimed the appropriate amount I would take offence to being accused of being implicit in any overclaim given I had no involvement in the claim.

This unfortunate situation is completely on the Revenue....

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Replying to justsotax:
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By Tax Dragon
15th Sep 2021 11:11

justsotax wrote:

The Revenue for their part explicitly excluded agents from the process...

That's simply not true. Clients could talk to agents, take advice, ask for help. Sure, agents couldn't actually make claims - but nor should they have been able to, any more than they can sign a mortgage application, or enter into any other financial contract on behalf of clients. That's not the same as not being involved.

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Replying to Tax Dragon:
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By justsotax
15th Sep 2021 13:35

It simply is....we can only interpret the guidance set by the Revenue which was reliant on the clients view of his business and the impact of COVID impact, and for them to make the direct application without any input from others.

SEISS isn't covered in our letter of engagement....so it is not advice we are engaged to provide. In the same way that we don't do their payroll for example, for which I would undertake work to check if it has been processed correctly....unless the client specifically engaged me to......

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Replying to justsotax:
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By Tax Dragon
15th Sep 2021 15:56

justsotax wrote:

SEISS isn't covered in our letter of engagement....

You mean your letters of engagement individually and specifically list the elements of the self assessment which you are prepared to deal with? Interesting approach. Is anything else (apart from SEISS) not included? What do you do when a client presents with an element that you don't deal with? [I guess in fact SEISS makes that question especially relevant this year!]

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Replying to Tax Dragon:
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By justsotax
15th Sep 2021 17:23

No the LOE doesn't include reference to advising as to how to apply for SEISS....but if a client wanted that advice I would have put an LOE in place for that specific advice (as its not tax advice)....do you not? (did you not have a separate LOE for CJRS claims....your responses suggest not.....interesting approach).

I wonder whether you check that your clients have claimed child benefit for the correct amount of kids....I mean the details do have to go on the Return so you must (by your suggestion) need to check their application etc.....

However, I do applaud you for trawling through all your clients SEISS claims to ensure that they are correct, and that each and everyone of your clients has made the application on the correct basis....I can only presume you have or will be interrogating each of your clients to ensure that each specific claim has been made correctly..... I hope they printed out their applications out, as I presume you will be advising the Revenue they overclaimed if they haven't even got that basic level of detail.....??

But seriously where is your cut off.. to what extent do you feel it is your responsibility....will you be checking each individual SEISS claim, based upon presumably your client's application, their circumstances as described by them etc......

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Replying to justsotax:
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By Tax Dragon
15th Sep 2021 17:38

Child benefit is a very good analogy.

HICBC is a tax charge that's part of the self assessment. Claiming child benefit in the first place is not.

The para 8 Sch 16 FA 2020 liability is a tax charge that's part of the self assessment. Claiming SEISS grants in the first place is not.

Our engagements mean we deal with the self assessment. We don't make claims to child benefit. We don't make claims to SEISS grants.

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Replying to Tax Dragon:
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By justsotax
16th Sep 2021 11:29

you seem to be agreeing that it is only our job to disclose the amounts claimed.....change of heart?

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Replying to justsotax:
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By Tax Dragon
16th Sep 2021 12:23

If I am aware that a client is claiming child benefit that isn't due, I guess that's fraud and I have to notify our MLRO.

Based on previous discussions in this forum, if a client claimed SEISS that wasn't due, that wasn't necessarily fraud and I may not have to notify the MLRO. I presume that government and HMRC agree that conclusion, because otherwise para 8 is hard to explain. However, failing to self assess tax under para 8 when such tax is correctly payable is a more serious matter. An accountant failing to mention the tax charge under para 8, when such tax is correctly payable, is... is negligent? I don't know - you tell me.

I sense you haven't actually read Sch16. I commend it to you.

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Replying to Tax Dragon:
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By justsotax
16th Sep 2021 15:44

In the end the client is responsible for their Tax Return ....I haven't seen anything in Schedule 16 that suggests otherwise......

As asked before, how far will you be checking clients applications to ensure you are not negligent, I presume everyone, based upon an interview with the client to understand their business activity at the time, and a copy of their application?

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Replying to justsotax:
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By Tax Dragon
16th Sep 2021 16:21

Most of the time it won't be hard, will it? You won't need to think about it for more than 40 seconds - far less time than I assume you spend considering private use adjustments of holiday accommodation, etc.

But, I would suggest, there will be cases - and the OP's case is possibly one of them - where you need to go further than "whaddya get?" You don't need to be shining lights into their eyes, but you need to have your own eyes open to the fact that there are people in this big old cosmos that are liable to tax under para8, some of those people may be clients of yours - and your institute, if you are a member of one, expects you to help your clients pay the correct amount of tax, including that due under para8.

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Replying to Tax Dragon:
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By justsotax
16th Sep 2021 16:47

40 seconds.....sounds like a thorough check in keeping with your beloved para 8.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
15th Sep 2021 11:23

Tax Dragon wrote:

Are you serious? As has been pointed out in here a billion times, Sch 16 FA 2020 makes this a tax matter dealt with under self assessment. Who advises clients on self assessment? You. Not HMRC, you.

Ahha, and good morning to you Soup Dragon!

I get that. I'm wondering aloud whether that duty might crystallise itself into a SA return(s) submission along the lines of the additional CT600 boxes this year for CJRS figures entitlement and claims.

If not, then given that HMRC themselves performed the actual SEISS calculations then surely it shouldn't be incumbent on us to re-crunch those numbers; in which event our involvement must necessarily be confined to verifying a client's actual entitlement to SEISS.

And given the client will have already have affirmed those various entitlements in his SEISS applications to HMRC, I'm left wondering whether that should constitute sufficient evidence so far as an agent is concerned.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
15th Sep 2021 12:51

I'msorryIhaven'taclue wrote:

given that HMRC themselves performed the actual SEISS calculations then surely it shouldn't be incumbent on us to re-crunch those numbers; in which event our involvement must necessarily be confined to verifying a client's actual entitlement to SEISS.

Excellent point. Really excellent point. I don't know. How do you read para8? Does it answer your question?

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Replying to AdamMurphy:
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By Tax Dragon
15th Sep 2021 11:01

AdamMurphy wrote:

Exactly. HMRC didn’t want us involved in making the claims....

And how eternally grateful you should be to HMRC for that. You could have had the pants sued off you had you been responsible for making (or not making) claims. (I doubt your PII covers such work.)

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
15th Sep 2021 11:28

Indeed, perhaps we should even be rubbing our hands together gleefully when greedy self-employed clients enlist our help to help them sort out any after-the-event HMRC investigations into their SEISS claims.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
15th Sep 2021 12:43

I'msorryIhaven'taclue wrote:

Indeed, perhaps we should even be rubbing our hands together gleefully when greedy self-employed clients enlist our help to help them sort out any after-the-event HMRC investigations into their SEISS claims.

Well, if it's gotten as far as HMRC enquiry, which enquiry results in tax being found to be due under para 8 of Sch 16, such potential liability the accountant having omitted from the tax return and said accountant having failed even to discuss the issue with the client... that ain't great, is it? In fact, I wonder where liability (for the cost of dealing with the enquiry, obvs - as ever, the tax liability itself would rest with the client) might fall. Seems to me that the accountancy service provided here could reasonably be described as p155p00r.

I further wonder whether fees insurance would cover the cost of dealing with enquiries resulting from a p155p00r accountancy service.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
15th Sep 2021 14:44

I don't think this would be a matter of omitting anything from an SA return. Surely the question surrounds the policing of a client's affairs: whether he overclaimed (and I repeat, the Revenue themselves quantified the SEISS claims; so "overclaimed" from our viewpoint must boil down to a question of fact as to whether the client actually met the various criteria for the SEISS 1 to 5 claims).

I don't think anyone's suggesting we should omit any such overclaim(s) from a S.A. return.

You seem particularly fiery today.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
15th Sep 2021 15:47

Sorry to be thick, but... if you don't omit the overclaim, what's the HMRC enquiry about?

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
15th Sep 2021 16:21

No worries, the "enquiry" we're envisaging is one in which the client has overclaimed SEISS; which is the subject matter raised by the OP.

To which I'm responding that the Revenue work out the entitlement at the point of claim (based upon the client's input). Outside of correcting wrongly pre-populated (by the Revenue) boxes and/or reporting any ineligible SEISS claimants, I don't understand why the OP feels obliged to go to quite so much trouble as to ferret through his client's claim(s). Surely entering whatever SEISS amounts the Revenue decided to award onto the client's tax return is adequate.

Ours is not to reason why,
Ours is but to do and sigh.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
15th Sep 2021 16:33

Ok, maybe we read the question differently. (I have asked the OP what the intended question was, to date without response.)

I assumed the OP thought the client was, in your words, an ineligible claimant (in respect of one or more claims made). If the claims were valid but an excessive amount was received (i.e. there was HMRC error, not client malfeasance/carelessness), then I can see (or at least empathise with) the "it's HMRC's [***]" argument.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
15th Sep 2021 16:54

Well I'll grant you the OP certainly appeared to be putting himself to a great deal of trouble to check over his client's SEISS claims; which I read as proposing to verify the client's entitlement.

But the criteria for claims 1 to 5 have been shifting sands. The latest #5, for example, is based upon the sales income drop between April '20 & April '21 and an earlier relevant period (nominally the 2019/20 SA return sales income). Which doesn't make any real sense because somebody who's returned to work post July '21 lockdown and is currently raking it in still qualifies, perhaps even for the higher 80% award.

I'm not sure why the OP would want to put themselves through all the anomalies of the SEISS qualification criteria and/or go to the bother of checking the Revenue's award calculations. Rightly or wrongly I'm planning to regard SEISS awards in the same fashion as I treat Universal Credit awards to clients. But, hey, what do I know ;-)

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Replying to I'msorryIhaven'taclue:
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By Geoff56
15th Sep 2021 17:11

" because somebody who's returned to work post July '21 lockdown and is currently raking it in still qualifies, perhaps even for the higher 80% award."

But they do have to confirm a belief that their trading profits May to Sept 21 will be significantly reduced, due to covid.

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Replying to Geoff56:
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By I'msorryIhaven'taclue
15th Sep 2021 17:33

Well that's the direction the OP's headed in. All a bit nebulous.

But yes, why not, because if they're staring back in earnest during July or August then there's every chance their profits will be reduced over that period; and even wider scope to harbour a belief that they will be so reduced; and "significantly" is IMHO too subjective to impact upon any such belief.

Regardless of the particular criteria that applied to each separate round of SEISS, I'm struggling to understand why we might take it upon ourselves to look into our clients' minds and attempt to justify their bases for making SEISS claims. Ditto those who claim Universal Credit.

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By Tax Dragon
15th Sep 2021 10:09

The question in your heading is about how to deal with an overclaim.

The body of your OP reads like you want people in here to comment on whether there has been an overclaim.

What did you intend to ask? (Obviously, we can answer your heading, not your body.)

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Replying to Tax Dragon:
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By Hugo Fair
15th Sep 2021 11:54

Blimey, you oversleep and wake up to find posts like this!
"he took a day rate cut of £10.00 per day, but only until October 2020 when it was increased £1.75 per hour to £16.75 per hour. He worked approx. 96 days until October 2020. Advice please as to how to deal with this overclaim."

What overclaim?
Nothing in that list has anything to do with a SEISS claim or its eligibility. Does OP think the scheme was just a self-employed variant of CJRS?

As TD says/hints, no-one here can answer for certain whether there was any overclaim of the SEISS (as none of the relevant factors have been mentioned) ... but based on the info provided - NO.

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ALISK
By atleastisoundknowledgable...
15th Sep 2021 12:45

FWIW literally my only input / acknowledgment of SEISS is asking the client what figures they’re received to include on the SATR.

Just to add fuel to a new argument.

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Replying to atleastisoundknowledgable...:
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By Tax Dragon
15th Sep 2021 12:55

Tbh, it would add fuel (to a new(?) argument) only if there was an element of surprise in what you said. There was no such element.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
15th Sep 2021 16:26

He was fanning the flames of the old.

Ahh, you're so tetchy today TD. Go sit in the sun in a beer garden for a while. And try not to snap at the staff!

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Replying to atleastisoundknowledgable...:
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By Matrix
15th Sep 2021 12:54

I ask for the figures and any amounts overclaimed.

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By GHarr497688
15th Sep 2021 19:49

Why not abolish HMRC and make Accountants the tax inspectors - the Accountants role is not to spy on the client. The role of an Accountant is to assist with compliance and help the business. The business is still responsible for running the business. It would be impossible to check all the claims and so I think you are overthinking the process.

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Replying to GHarr497688:
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By Tax Dragon
15th Sep 2021 20:44

GHarr497688 wrote:

The Accountants role is not to spy on the client.

Agreed. The accountant is merely responsible to the client for the accuracy
of the filing based on the information provided. The accountant should act in good faith in dealings with HMRC in accordance with the fundamental
principle of integrity. In particular the accountant should take reasonable care and exercise appropriate professional scepticism when making statements or asserting facts on behalf of a client.

How these principles are expressed possibly depends on which professional body (or bodies) the accountant has joined.

IMHO, ALISK's approach (and he's not alone) of just asking "how much did you get?" fails to take reasonable care. It fails to... it fails on every part of those principles. IMHO it fails the profession. (I assume ALISK is a member of one of the institutes - but really that's not the point.)

We all agree - I agree - that the majority of the time, it's obvious whether a claim was valid. Justso's outburst about trawls and interrogations was... well, to be polite, let's just say that I hope justso realises, on reflection, just how daft it was. But I don't mind calling out ALISK's attitude as being unprofessional. IMHO. You don't have to agree with that assessment. You won't be alone if you don't.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
16th Sep 2021 13:40

Tax Dragon wrote:

You don't have to agree with that assessment. You won't be alone if you don't.

Hang on, if I won't be alone if I don't agree with that assessment that means I could be alone if I do agree with it.

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
16th Sep 2021 13:59

I'msorry, the ape creatures of the Indus have mastered this. Let's try again shall we? If we have me that agrees with a statement, and you agree with the same statement, how many of the people that agree with the statement are alone in agreeing with the statement?

(Thank you for giving me the opportunity to remaster one of my favourite Blackadder moments.)

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
16th Sep 2021 16:16

Tax Dragon wrote:

Let's try again shall we? If we have me that agrees with a statement, and you agree with the same statement, how many of the people that agree with the statement are alone in agreeing with the statement?

But you said I wouldn't be alone if I don't agree with that statement.

So if we have you that disagrees with the statement and I also disagree with the statement, then how many of the people that disagree with the statement are alone in disagreeing with the statement? (Answer: none - because other(s) disagree with the statement; although you could be alone if you agree with the statement - say because *no-one else in the Forum agrees with the statement).

* ALISK certainly disagrees with the statement!

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
16th Sep 2021 16:47

I've said too much in this thread (a statement I should think everyone agrees with) without you drawing me into this dead-end sideline. Consequently, I'll see you on other threads. Bye for now.

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Replying to Tax Dragon:
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By I'msorryIhaven'taclue
16th Sep 2021 18:16

No soup for froglets :-(

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By Calculatorboy
16th Sep 2021 00:37

You are overthinking , hmrc purposely excluded accountants from this carbuncle ,
so why risk giving yourself a coronary over it , for trivial amounts ?

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Replying to Calculatorboy:
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By Tax Dragon
16th Sep 2021 03:52

At least s/he's thinking.

Unlike anyone using the brain dead "HMRC excluded us" non-argument.

Mind you, I still don't actually know what the question was. Which is ironic, given how much I've spouted off on this thread. Oh I do love a good irony, me. As you know.

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By paul.benny
16th Sep 2021 10:31

We've all has a jolly nice discussion on this. But where's the OP?

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Replying to paul.benny:
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By I'msorryIhaven'taclue
16th Sep 2021 10:57

Good question. This often happens when the panel debate robustly and the OP slips out the nearest fire exit.

OP, has your client asked you to help him assess, quantify, or declare his overclaim? That might shed a different light on the matter.

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Replying to paul.benny:
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By AdamMurphy
17th Sep 2021 15:48

With TaxDragon's "tone of voice" I'm not surprised they left the room.

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By I'msorryIhaven'taclue
17th Sep 2021 20:39

Matron's planning to increase TD's medication.

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Replying to AdamMurphy:
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By Tax Dragon
19th Sep 2021 07:20

I apologise to the OP if my "tone of voice" had the effect you assert. I hope though that it is obvious to any and all readers, including the OP, that the content (and, to be fair, the tone) of my posts is somewhat greater than your sole, vacuous, chip-on-shoulder, censored response (which, to do full justice to your insight, I will quote in full this time... well, as fully as the censorship permits):

AdamMurphy wrote:

Exactly. HMRC didn’t want us involved in making the claims, so they can sort their own [***] out.

The only way I've managed to read an attempt to address the issue the OP raised* into this response is to take your meaning to be that no accountant** should make any effort to ensure that any client's tax return is correct, in relation to SEISS. Maybe you would even knowingly submit incorrect returns/make incorrect self assessments on behalf of clients and you were encouraging the OP to do likewise? I don't know - if you care to expand on your post, please, it'll probably help us all. And it might even bring the OP back into the room - which would in itself be helpful, as I don't think I'm the only one*.

* I still don't know what the (nub of the) question was.

** Honest question for you: do you think taxpayers should make an effort to declare the correct tax? Is your answer different (and if so why) if the taxpayer is represented by an accountant?

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Replying to Tax Dragon:
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By AdamMurphy
19th Sep 2021 07:50

As your reply here shows, and further ones above to other people, you can’t answer without being rude and insulting, so you won’t be drawing me into further discussion after this post. Nice try.

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Replying to AdamMurphy:
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By Tax Dragon
19th Sep 2021 09:05

Your reply here is just as helpful (to the OP, to anyone) as your first.

I regret that you have taken offence - possibly at my choice of adjectives (helpful, brain dead, vacuous, unprofessional etc)? Yet none of those was aimed at any individual; rather, all were used to describe behaviours or comments/analyses, such as your insight about it being HMRC's mess. Maybe you're right, maybe I simply miss the profundity of your comment. Maybe it's me that's brain dead, vacuous, unprofessional etc. (Ah, you got me... there I am using those adjectives ad hominem... but as it's about myself, I figure I'm allowed.)

I'll try to remember not to use adjectives at all in here in future. Seems it can cause disharmony. And it's a lazy way of talking. (Ah... I'd managed to go this whole post without adding more... until I wrote "lazy"! Ha! Somewhat ironic as I'm not sure how to rewrite that sentence without using the adjective! Perhaps I mean I'll try to reduce the number of adjectives as far as reasonably sensible.)

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