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SEISS - HMRC overpaid and don't want it back!

My client has received a letter from HMRC saying they (HMRC) didn't take all info into account

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My client has just received a letter, purportedly from HMRC to say that they (HMRC) didn't take into account all relevant information when they originally determined eligibility and so paid too much (over £2k too much to be precise) however the letter says that "HMRC will not be taking any steps to recover it" - which seems to me to signal an HMRC foul-up rather than a client one.

My client is perplexed as the amount received in the first place was the amount that I had calculated so it is all a mystery.

Has anyone else had such a letter? If it was a scam I would expect them to be asking for the money to be returned (to some dodgy bank account) but there is nothing.

Replies (28)

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By sijolees
11th Aug 2020 10:55

Yes I had one from a client today too - my first thought was a scam as the letter was so vague (no address or telephone number etc) but it is I think genuine. They had overpaid my client but no reason given as to why.
There was an option to pay back but it is voluntary.

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Replying to sijolees:
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By Paul Crowley
11th Aug 2020 11:00

Definitely a scam. HMRC do not ask for voluntary contributions.

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Replying to Paul Crowley:
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By mdoodney
12th Aug 2020 09:37

Actually they will sometimes ask for voluntary restitution in respect of amounts they have no right to assess, for example in enquiries where they are time barred by reference to behaviours. I have had two letters recently where this has been suggested, so there may have been a steer to push this option.

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By Paul Crowley
11th Aug 2020 11:04

Redacted copy would be helpful. Sounds like letter 1 and letter 2 will say yes, you must repay, or it will be a telephone call saying that must pay today or there will be a penalty.

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Replying to Paul Crowley:
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By WhichTyler
11th Aug 2020 11:19
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Replying to WhichTyler:
Chris Caspell CTA TEP
By ccaspell
11th Aug 2020 11:27

Yes that's the letter.

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Replying to ccaspell:
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By Paul Crowley
12th Aug 2020 15:57

Only one I have seen. Is there another page asking for voluntary contributions?

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Chris Caspell CTA TEP
By ccaspell
12th Aug 2020 16:46

I was only sent the one page by my client, so I have not seen evidence first hand that HMRC are asking for voluntary contributions. To be honest, it is not really something that HMRC tend to do so, unless it is a 'one off', I shall wait until I see the request in person before commenting further.

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Replying to Paul Crowley:
Chris Caspell CTA TEP
By ccaspell
11th Aug 2020 11:27

I am not sure that images can be uploaded to AccountingWeb or I would happily do so. If it is possible

However, I do not think it is a scam otherwise they would have either (a) asked for the money to be repaid and (b) given a link/web address/number to call to make the payment. They have specifically said that HMRC will NOT be taking any steps to recover the money, though you must include the SEISS grant received as taxable income on the self assessment return (which we all knew anyway).

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By thomas34
11th Aug 2020 11:40

Lucy's got a way with words.

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Replying to thomas34:
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By Rammstein1
11th Aug 2020 11:42

I hope Lucy gets the 2nd SEISS grant or she won't be happy. I reckon she should get about £58.

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Replying to thomas34:
Oaklea
By Chris.Mann
11th Aug 2020 12:06

She certainly comes across as quite spirited!

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Replying to thomas34:
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By Paul Crowley
11th Aug 2020 12:07

But not with business, if genuine then self employed ptofits abount £335 PA

9 jobs lost in 5 months, profit lost estimated at £139

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By petestar1969
12th Aug 2020 10:09

.

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By jonharris999
11th Aug 2020 12:23

I don't think this is a scam. A similar letter was widely shared on the "Excluded" Facebook group yesterday having been received by a chap who had previously had a long (and ultimately successful) appeal to have his earnings re-allocated from employment to self-employment because there had been some (apparently genuine) error in the original allocation.

@ccaspell Do you know why the change in decision?

I have an FoI request into HMRC about why some such appeals have apparently been allowed and will share anything I learn of interest.

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Replying to jonharris999:
Chris Caspell CTA TEP
By ccaspell
11th Aug 2020 12:35

See my comment below. It seems that HMRC ignored losses and divided the profits earned over the profitable months rather than the number of months that the individual was self-employed.

Looking back over emails that I sent to clients in May (in response to their receiving the grant) for those with losses in the previous three years where the calculation was different to what I had calculated, I did tell them to look out for a letter in the future to say that the calculation they had done was incorrect, though I was not expecting HMRC to write off the over payment.

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Chris Caspell CTA TEP
By ccaspell
11th Aug 2020 12:27

I've just had a look at this further. HMRC have ignored earlier losses and scaled the resulting profit over the number of profitable months - so in my client's case, he had a loss in 2016/17, and profits in 2017/18 and 2018/19.

So HMRC have added the two years' profits and divided the total profit by 24 months to come up with an average monthly profit. They have then taken 80% of this and multiplied the result by 3 to give the claim - which they paid.

This sounds like a massive [***]-up on the part of HMRC. There must be plenty of self-employed businesses that had a loss in one year and so received a benefit from HMRC ignoring this loss.

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Replying to ccaspell:
By ireallyshouldknowthisbut
11th Aug 2020 15:32

That would probably explain why one of mine got more than I expected.

I only have 20-30 sole traders on my books so don't have a very big sample size.

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the sea otter
By memyself-eye
11th Aug 2020 13:34

Why would anyone other than HMRC actually 'write'? It's so yesterday's mode of scamming!

No one ever writes to me....Billy no mates I am.

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By Paul Crowley
11th Aug 2020 14:11

This appears then to confirm why scammers are able to convince the unsuspecting. HMRC sending out scam like unidentifiable letters, without involving agents or admitting their own ineptitude.

I really should by now not be surprised at anything HMRC gets wrong.

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By wyrdin
11th Aug 2020 21:43

I received one of these letters,
I am a private hire taxi driver
(Sole Trader)
I do my own accounts.
My seiis grant I received was exactly what I expected.
The HMRC correction raises a few questions;

How can I ask HMRC to show me the Math for the correction?

If they were wrong, i.e. they paid me the correct amount on the seiss grant. How do I challenge this to ensure I get the right payment on the second SEIIS.

If their correction is correct is there an implication that my previous 3 years tax bills have been incorrectly calculated by Hmrc?

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Replying to wyrdin:
Chris Caspell CTA TEP
By ccaspell
12th Aug 2020 00:29

HMRC won’t show you how they calculated the grant, but it is fairly methodical. Ross Martin explains it chapter and verse very well on her website here: https://www.rossmartin.co.uk/covid-19/4632-covid-19-proposed-statutory-s.... Look at the examples at the bottom.

If you still don’t get it, send me a PM and I’ll see what I can do to help.

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RLI
By lionofludesch
12th Aug 2020 10:15

.....over £2k too much to be precise.......

"Over £2k" is not "precise".

Just saying ........

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Replying to lionofludesch:
Chris Caspell CTA TEP
By ccaspell
12th Aug 2020 16:50

I stand...nay sit...corrected. It is, however, quite a chunk o' change...unless it's in notes, then it isn't change...and if it is a bank transfer....well... (smiling all the way to the bank here)

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Replying to ccaspell:
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By Paul Crowley
13th Aug 2020 09:54

Did your letter also offer the opportunity to repay?

As per first response sijoles

Not seen one, just the link to Lucy above

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By Jo Nokes
12th Aug 2020 13:59

I told a client the grant he could expect, and when he received over £1,000 more than I had calculated, I warned him he might have to repay it.Yesterday, he received the same kind of letter, pointing that not all the information had been acted on, and the result was an overpaid grant. Repayment if you wished to do so was an option ,but no steps would be taken to recovery it. It also pointed out that the next claim would be a smaller percentage than the first one, but it wouldn't be reduced by the overpaid amount. I really don't think it's a scam.

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By Jo Nokes
12th Aug 2020 13:59

I told a client the grant he could expect, and when he received over £1,000 more than I had calculated, I warned him he might have to repay it.Yesterday, he received the same kind of letter, pointing that not all the information had been acted on, and the result was an overpaid grant. Repayment if you wished to do so was an option ,but no steps would be taken to recovery it. It also pointed out that the next claim would be a smaller percentage than the first one, but it wouldn't be reduced by the overpaid amount. I really don't think it's a scam.

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