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SEISS grant overstated by HMRC?

SEISS grant overstated by HMRC?

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I have so far come across 3 cases amongst my clients where the SEISS grant received by them appears to have been overstated.

Each of the 3 clients has been self-employed for many years and each of them appears to be eligible under all relevant criteria.

All 3 clients should have received an SEISS grant calculated on the basis of their average profit for the 3 years to 2018/2019.  One of them has even forwarded to me a screenshot from their claim, where HMRC have stated this as being the basis of the calculation. 

The problem is that the figure shown by HMRC as being the average of the 3 years is in fact the 2018/2019 profit and the grant has been calculated on that figure.  Since, in each of the 3 cases, the 2018/2019 profit was higher than the average for the 3 years, all 3 clients have received an amount greater than that to which they were entitled.

Has anyone else come across the same issue and does anyone have advice on how to correct matters?

Many thanks for any guidance and assistance.

Replies (7)

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By Tim Vane
23rd May 2020 11:57

Sounds like a software issue at HMRC. Perhaps not surprising giving the time constraints they’ve been under. Just tell your clients what they should have expected to receive and advise them that HMRC will presumably assess them on the overpayment at some point and want it back. I would not bother wasting any time trying to sort it out now as you‘ll likely be on a hiding to nothing.

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RLI
By lionofludesch
23rd May 2020 13:35

I'd write to HMRC and tell them. Just to cover my back. Nobody will read it, obviously.

To answer your question, no, they've all been as calculated by Taxfiler and me, rounded up to the next quid.

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By fawltybasil2575
24th May 2020 12:06

@ jonkaye (OP).

It appears most strange that you have three clients, for whom the exact same HMRC has occurred (all SEISS claims submitted by my clients, have, to the best of knowledge, been correctly calculated).

I assume that you have notified the clients that the SEISS Grant monies received by them are overstated - if not, please do so. Please also advise each client of your obligation to notify HMRC of the overpayment; and of course do so. If the overpayments are material, then request the clients to “earmark” the overpayment for imminent return to HMRC.

Three letters to HMRC of course will be required (one for each client) all sent in the one envelope (with a file note to the effect that they were posted in the same envelope, to cover the possibility of HMRC’s contending improperly that they have not received one of the three letters - such “precautions” are currently necessary in view of the unacceptably low ethical standards within HMRC).

Basil.

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By legerman
24th May 2020 14:47

I have had exactly the same with one of my clients, previously documented here.

2 years profits average 27.5k per year but grant calculated on 41k profits 2018-19

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By fawltybasil2575
24th May 2020 15:00

@ legerman.

Are you sure that, in the course of submitting the claim, the taxable profit figures were shown for ALL three tax years ?

Did the client receive CONTINUOUS self-employment income throughout the three tax years ?

Basil.

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Replying to fawltybasil2575:
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By legerman
25th May 2020 12:06

fawltybasil2575 wrote:

@ legerman.

Are you sure that, in the course of submitting the claim, the taxable profit figures were shown for ALL three tax years ?

Did the client receive CONTINUOUS self-employment income throughout the three tax years ?

Basil.

Self employed 17/18 to present. £14k 17/18 and £41k 18/19. I don't know what it showed when he was making the claim but he's just been on the gg to check and it doesn't give that information.

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By fawltybasil2575
25th May 2020 18:08

@ legerman (your 12.06 post).

Forgive me for misinterpreting your previous post, inasmuch as I thought that the £27.5K was the average trading income for 2016/17 and 2017/18, followed by the larger figure of £41k in 2018/19.

In intending no offence, I think your client’s case shows the value of notifying the clients, in advance, of what one expects the SEISS Grant figures to be (asking them to phone you if possible, whilst submitting the claim, if the Grant figure shown by the system differs from the figure which you have given to them). In this case, the Grant will have been £7,500, instead of the correct figure of £5,500 which you would have notified him in advance - you would have been thus able to ask him to print off the relevant page which (so I understand) showed the detailed figures.

You are of course required to notify HMRC of the overclaim of £2,000; and request them to advise of the reason for the error. If both the 2017/18 and 2018/19 Tax Returns were submitted by you, I cannot readily understand the error, other than some gremlin affecting the inputting of the 2017/18 Tax Return (possibly related to its being presumably the first Tax Return submitted) into HMRC’s systems.

Importantly, the HMRC instructions, in their webinars, are to submit the SEISS claims even if one believes the Grant figures shown by the claim process to be incorrect, an irrational instruction in my submission (there should have been some method of notifying HMRC that one did not agree the HMRC figure, in that claim process). I mention the point in case HMRC seek to later contend (improperly) that your client was at fault for submitting an "incorrect" claim.

Basil.

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