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HMRC to block SEISS grants where no reply

Self-employed traders must respond to HMRC’s email about their business by 20 November 2020 or they won’t be able to make a further claim for another SEISS grant.  

19th Nov 2020
Tax Writer Taxwriter Ltd
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24,000 self employed traders who received HMRC emails risk losing SEISS grants if they don't reply
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Approximately 24,000 self-employed traders who have claimed a self-employed income support (SEISS) grant recevied emails from HMRC in October asking whether they were still trading.

Who has been contacted?

The receipients represent less than 1% of the 2,657,000 traders who had claimed either or both of the first or second SEISS grants by 30 September.  HMRC only sent emails to people who it believed have ceased trading, based on information it holds. This data could be a cessation date for the business reported on the 2019/20 tax return, an application to deregister for VAT, or information from another source.

Cancelling a VAT registration does not mean the business has ceased trading. Many businesses will have experienced a reduction in trade during the pandemic that could take their expected sales for the next 12 months below the deregistration threshold of £83,000.

As Neil Warren explained, however, a trader should not deregister in haste where their reduction in turnover is solely due to an intention to suspend trading for 30 days or more.

How to reply

The taxpayer is asked to respond to HMRC by completing an online form to confirm they have stopped trading and permanently closed the business. If the business ceased on or before the day they applied for the SEISS grant they will have to reply that funding.

Tax agents were not able to apply for SEISS grants on behalf of their clients, so advisers will not have seen the emails HMRC sent directly to the taxpayer. Ask your client to check their junk and spam boxes for emails from HMRC as soon as possible.  

If the trader does not respond to HMRC’s email by close of business on Friday 20 November they will be prevented from applying for further SEISS grants.

Who is excluded? 

The portal to apply for the third SEISS grant will open on 30 November and the funds should be paid out within six working days. But as for the previous SEISS grants the third grant will be calculated as 80% of the trader’s average annual profits, and paid for a three month period, capped at £7,500.

However, the average profits are still based on historical profits reported for the years 2016/17 to 2018/19. Any self-employed individuals who started trading on or after 6 April 2019 are excluded from the SEISS.

HMRC’s own statistics show that of 5m people who reported self-employed income in 2018/19, only 3.4m were potentially eligible for the SEISS grant, as at least half of the taxpayer’s income had to come from self-employed profits. Also those with average annual profits exceeding £50,000 were not eligible, even if their income dropped significantly due to coronavirus.   

The Institute for Fiscal Studies estimated that of traders who have at least half of their annual income made up of self-employed profits, 18% were ineligible for SEISS grants. Also, of all taxpayers with some self-employed income in 2018/19, some 38% did not qualify for SEISS.   

Some of the potentially eligible traders won’t have been adversely affected by the coronavirus pandemic (a fact HMRC would not know from past returns), or will have ceased trading since April 2019.

Replies (17)

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avatar
By Paul Crowley
19th Nov 2020 18:29

Much appreciated
Would that average out to less than 1 per accountancy practice?

Reply to confirm Shut?

By tomorrow, Friday

https://www.ftadviser.com/your-industry/2020/10/15/hmrc-emails-24-000-in...

Thanks (0)
By Duggimon
20th Nov 2020 09:36

On the face of it we ought not to be worried as the HMRC email was sent only to those who had told HMRC they had ceased trading, then claimed under the scheme anyway.

However, as evidenced by numerous difficulties with eligibility in the first place, with which I'm sure my fellow members will also have experience, what HMRC think they know about a business, and even what they think they've been told by the business, often bears no more than a tangential relation to reality. Who really knows who might have got this email?

Thanks (2)
blue sheep
By NH
20th Nov 2020 10:13

Presumably the email from HMRC told them the consequences of not replying, in which case if they don't reply its their hard luck, I have enough to worry about with clients that actually respond to emails I'm not going to worry about those that can't be bothered.

Thanks (0)
Replying to NH:
Morph
By kevinringer
20th Nov 2020 10:52

The full text of the email:

Dear [claimant],
The purpose of the Self-Employment Income Support Scheme (SEISS) is to help self-employed individuals and members of partnerships who have been adversely affected by coronavirus.
To be eligible for SEISS all these conditions must apply:
1. You traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
2. You traded in the tax year 2019 to 2020
3. You intend to continue to trade in the tax year 2020 to 2021
On your tax return for either 2018 to 2019 or 2019 to 2020 you indicated that you had stopped trading. This means you were not eligible to receive a grant and will need to repay the money you received.
Please refer to the FAQs below if you need more guidance on what this means.
What you need to do now
Please review your SEISS grant application by 20 November 2020.
If you do not complete either action 1 or 2 outlined below by this date, we may start a formal compliance check. This may mean you have to pay a penalty and statutory interest.
Action 1
If you did not trade in both tax years 2018 to 2019 and 2019 to 2020 and did not intend to continue your trade in 2020 to 2021:
You do not meet the requirements to claim a SEISS grant. You must:
• Go to gov.uk and search ‘Stopped trading SEISS’.
• Complete the online form.
• You do not pay at this point. We will contact you to tell you how to pay what you owe.
Action 2
If you did trade in tax years 2018 to 2019 and 2019 to 2020 and intended to trade in 2020 to 2021:
If you have not stopped trading and believe your SEISS grant was correct, you must:
• Make sure you are registered for Self-Assessment.
• Make a return by the filing date. Include SEISS grant as income.
• Go to gov.uk and search ‘Stopped trading SEISS’.
• Complete the on-line form.
• There is no need to provide evidence, but we may contact you at a later point to verify the information.
More information
Our phone lines are very busy. To find help and further information:
1. Go to gov.uk and search ‘check if you can claim a grant through the self-employment income support scheme’
2. Email us at [email protected] and protect your information by following the guidance below.
If you cannot find the support you need by these two routes, then call the COVID helpline on 0800 024 1222
Protect your information when using email
We take the security of personal information very seriously. Email is not secure, so it’s very important that you follow our advice on staying secure when emailing us.
The main risks associated with using email that we need you to consider are:
• Confidentiality and privacy – there’s a risk that emails may be intercepted and read by someone else
• Confirming your identity – it’s very important that we only communicate with the right people using their correct email addresses
• Security – there’s no guarantee that emails have not been intercepted and changed before being delivered
• Attachments – these could contain a virus or malicious code
Using email to respond to this email means that you understand and accept these risks.
If you email us at [email protected], please:
• Send the email from your business email address
• Do not include any financial information or attachments
• Include
the SEISS grant claim periods that you intend to disclose
the SEISS claim reference number(s)
FAQs
What is a trade?
If you are trading you would have filled in the self-employment pages on your Self-Assessment tax return (whether trading in your own right, or in a partnership).
What do we mean by trading in the tax year?
You must have carried on a trade in tax years 2018-2019 and 2019-2020. It is not enough to trade in one year and not the other.
This doesn’t have to be the same trade. For example, you could be a hairdresser in tax year 2018 to 2019, and a car mechanic in tax year 2019 to 2020. But you needed to have traded in both years.
There is no need for you to have traded for the full tax year. You could have stopped a trade on 5 February 2019 (for example to have a baby) and then restarted the trade on 28 March 2020. This would meet the criteria of carrying on a trade in both tax years.
There is no need for two different trades to immediately follow each other, if a trade is carried on in each tax year.
When does a trade stop?
A trade stops when you do not intend to reopen or restart trading again. It does not stop if you only close temporarily or still intend to continue.
For example, if you shut your shop during the height of the first lockdown (as it was a non-essential shop) this would not necessarily mean you stopped trading. It could be temporary and just mean the shop was closed, the same as if someone closed for two weeks to go on holiday. You would only have stopped trading if you did not intend to reopen.
What do we mean by intend to continue a trade?
If at the time you made the claim for the SEISS grant you were intending to continue a trade in tax year 2020 to 2021 then you meet this requirement. This applies even if you still have not traded or no longer plan to, for example due to a change in circumstances since you claimed.
A word about scams
We are aware of an increase in scam emails, calls and texts. If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond.
You can forward suspicious emails claiming to be from HMRC to [email protected] and texts to 60599.
Yours Sincerely
SEISS Compliance Team

Thanks (2)
Replying to kevinringer:
avatar
By Paul Crowley
20th Nov 2020 11:45

Much appreciated

A long email, and quite likely to end up in spam

Thanks (1)
Replying to Paul Crowley:
Morph
By kevinringer
20th Nov 2020 12:05

Here in Wales it was twice the length because we also got it in Welsh. Here's the Welsh half:

Annwyl [claimant],
Diben y Cynllun Cymhorthdal Incwm Hunangyflogaeth (SEISS) yw helpu unigolion hunangyflogedig ac aelodau partneriaethau y mae coronafeirws wedi effeithio’n andwyol arnynt.
Er mwyn bod yn gymwys ar gyfer SEISS, rhaid i’r holl amodau canlynol fod yn berthnasol:
1. Gwnaethoch fasnachu yn ystod blwyddyn dreth 2018 i 2019 a chyflwyno’ch Ffurflen Dreth Hunanasesiad ar gyfer y flwyddyn honno ar neu cyn 23 Ebrill 2020
2. Gwnaethoch fasnachu yn ystod blwyddyn dreth 2019 i 2020
3. Rydych yn bwriadu parhau i fasnachu yn ystod blwyddyn dreth 2020 i 2021
Ar eich Ffurflen Dreth ar gyfer naill ai 2018 i 2019 neu 2019 i 2020, gwnaethoch nodi eich bod wedi rhoi’r gorau i fasnachu. Mae hyn yn golygu nad oeddech yn gymwys i gael y grant a bydd angen i chi ad-dalu’r arian a gawsoch.
Darllenwch y cwestiynau cyffredin isod os oes angen rhagor o help arnoch.
Yr hyn y mae’n rhaid i chi ei wneud nawr
Adolygwch eich cais am grant SEISS erbyn 20 Tachwedd 2020.
Os nad ydych yn cyflawni cam 1 neu 2 erbyn y dyddiad hwn, mae’n bosibl y byddwn yn dechrau gwiriad cydymffurfio ffurfiol. Gall hyn olygu bod angen i chi dalu cosb a llog.
Cam 1
Os na wnaethoch fasnachu yn ystod blynyddoedd treth 2018 i 2019 na 2019 i 2020 ac nid oeddech yn bwriadu parhau i fasnachu yn ystod 2020 i 2021:
Nid ydych yn bodloni’r gofynion ar gyfer hawlio grant SEISS. Mae’n rhaid i chi wneud y canlynol:
• Mynd i gov.uk a chwilio am ‘Stopped trading SEISS’.
• Llenwi’r ffurflen ar-lein.
• Ni fyddwch yn talu ar hyn o bryd, byddwn yn cysylltu â chi i roi gwybod sut y byddwch yn talu’r hyn sydd arnoch.
Cam 2
Os gwnaethoch fasnachu yn ystod blynyddoedd treth 2018 i 2019 a 2019 i 2020 ac roeddech yn bwriadu masnachu yn ystod 2020 i 2021:
Os nad ydych wedi rhoi’r gorau i fasnachu a’ch bod o’r farn bod eich grant SEISS yn gywir, mae’n rhaid i chi wneud y canlynol:
• Gwneud yn siŵr eich bod wedi cofrestru ar gyfer Hunanasesiad.
• Cyflwyno Ffurflen Dreth erbyn y dyddiad cau a nodi’ch grant SEISS fel incwm.
• Mynd i gov.uk a chwilio am ‘Stopped trading SEISS’.
• Llenwi’r ffurflen ar-lein.
• Nid oes angen i chi roi tystiolaeth, ond efallai y bydd angen i ni gysylltu â chi yn hwyrach i gadarnhau’ch gwybodaeth.
Rhagor o wybodaeth
Mae ein llinellau ffôn yn brysur iawn. I gael help a rhagor o wybodaeth:
1. Ewch i www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-...
2. Anfonwch e-bost atom yn [email protected] a diogelwch eich gwybodaeth drwy ddilyn yr arweiniad isod.
Os na allwch ddod o hyd i’r cymorth sydd ei angen arnoch, ffoniwch Wasanaeth Cwsmeriaid Cymraeg CThEM ar 0300 200 1900.
Diogelu’ch gwybodaeth wrth ddefnyddio e-byst
Mae diogelu gwybodaeth bersonol yn rhywbeth yr ydym yn ei gymryd o ddifrif. Mae anfon e-byst yn anniogel, felly mae’n bwysig iawn eich bod yn dilyn ein cyngor ynghylch bod yn ddiogel wrth anfon e-bost atom.
Y prif risgiau sy’n gysylltiedig â defnyddio e-byst mae angen i chi eu hystyried yw:
• Cyfrinachedd a phreifatrwydd – mae risg y bydd e-byst yn cael eu rhyng-gipio a’u darllen gan rywun arall
• Cadarnhau pwy ydych chi – mae’n bwysig iawn ein bod ond yn cyfathrebu â’r bobl gywir gan ddefnyddio’u cyfeiriadau
e-byst cywir
• Diogelwch – nid oes sicrwydd bod e-byst heb gael eu
rhyng-gipio a’u newid cyn iddynt ddod i law
• Atodiadau – gallai’r rhain gynnwys feirws neu god maleisus
Mae defnyddio e-bost i ateb yr e-bost hwn yn golygu eich bod yn deall ac yn derbyn y risgiau hyn.
Os byddwch yn anfon e-bost atom yn [email protected], dylech wneud y canlynol:
• Anfon yr e-bost o gyfeiriad e-bost eich busnes
• Peidio â chynnwys unrhyw wybodaeth ariannol nac atodiadau
• Dylech gynnwys
y cyfnodau hawlio grant SEISS yr ydych yn bwriadu rhoi
gwybod i ni amdanynt
y cyfeirnod(au) hawlio SEISS
Cwestiynau Cyffredin
Beth yw masnach?
Os ydych yn masnachu byddech wedi llenwi’r tudalennau hunangyflogaeth ar eich Ffurflen Dreth Hunanasesiad (p’un a ydych yn masnachu ar eich pen eich hun neu mewn partneriaeth).
Beth ydym yn ei olygu wrth ddweud ‘masnachu yn ystod y flwyddyn dreth’?
Mae’n rhaid i chi fod wedi cynnal masnach yn ystod blynyddoedd treth 2018-2019 a 2019-2020. Nid yw’n ddigon i fasnachu yn ystod un flwyddyn ac nid y llall.
Does dim rhaid i hyn fod yr un fasnach. Er enghraifft, gallech fod yn driniwr gwallt yn ystod blwyddyn dreth 2018 i 2019, ac yn fecanydd ceir yn ystod blwyddyn dreth 2019 i 2020. Ond rhaid i chi fod wedi masnachu yn ystod y ddwy flynedd.
Nid oes rhaid i chi fod wedi masnachu am y flwyddyn dreth lawn. Gallech fod wedi rhoi’r gorau i fasnachu ar 5 Chwefror 2019 (er enghraifft, er mwyn cael babi) ac yna ailddechrau masnachu ar 28 Mawrth 2020. Byddai hyn yn bodloni’r amodau o gynnal masnach yn ystod y ddwy flwyddyn dreth.
Nid oes angen i ddwy fasnach wahanol ddilyn ei gilydd yn syth, cyn belled â bod masnach yn cael ei chynnal ym mhob blwyddyn dreth.
Pryd mae masnach yn dod i ben?
Mae masnach yn dod i ben pan nad ydych yn bwriadu ailagor neu ailddechrau masnachu. Nid yw’n dod i ben os ydych dim ond yn cau dros dro neu’n bwriadu parhau.
Er enghraifft, os gwnaethoch gau’ch siop yn ystod y cyfnod clo (gan nad oedd yn siop hanfodol), ni fyddai hyn o reidrwydd yn golygu eich bod wedi rhoi’r gorau i fasnachu. Gallai hyn fod dros dro a golygu mai dim ond ar gau oedd y siop. Mae’r un peth yn wir os yw rhywun yn cau ei siop i fynd ar wyliau. Byddech ond wedi rhoi’r gorau i fasnachu os nad oeddech yn bwriadu ailagor.
Beth ydym yn ei olygu wrth ddweud ‘yn bwriadu parhau i fasnachu’?
Os oeddech yn bwriadu parhau i fasnachu yn ystod blwyddyn dreth 2020 i 2021 pan wnaethoch yr hawliad am y grant SEISS, byddech yn bodloni’r gofyniad hwn. Mae hyn yn gymwys hyd yn oed os nad ydych wedi masnachu eto neu os nad ydych yn bwriadu masnachu mwyach, er enghraifft oherwydd newid mewn amgylchiadau ers i chi hawlio.
Gair ynghylch sgamiau
Rydym yn ymwybodol bod nifer yr e-byst, galwadau a negeseuon testun sy’n sgamio wedi cynyddu. Os bydd rhywun yn cysylltu â chi, gan honni ei fod yn gweithio i CThEM a chan ddweud bod modd hawlio cymorth ariannol neu fod ad-daliad treth yn ddyledus, a’i fod yn gofyn i chi glicio ar gysylltiad, neu roi gwybodaeth megis eich enw neu fanylion eich cerdyn credyd neu’ch banc, peidiwch ag ymateb.
Gallwch anfon e-byst amheus sy’n honni eu bod yn dod oddi wrth CThEM i [email protected] neu [email protected], a gallwch anfon negeseuon testun i 60599.
Yn gywir
Tîm Cydymffurfiad SEISS

Thanks (1)
Replying to kevinringer:
blue sheep
By NH
20th Nov 2020 12:36

Diolch yn fawr

Thanks (0)
Replying to NH:
Morph
By kevinringer
20th Nov 2020 12:56

Croeso

Thanks (0)
Replying to kevinringer:
avatar
By JD
20th Nov 2020 18:30

Do HMRC really think that the average client is going to take the time to read this, let alone understand it.

Have a feeling most will take option 1 Delete or Option 2. Forward to Accountant, who they expect will deal with it for free.

Thanks (0)
Morph
By kevinringer
20th Nov 2020 10:43

WARNING: HMRC have sent the email to continuing businesses THAT HAVE NOT told HMRC they have ceased!

I have had two cases of partners is ongoing partnerships who have received the email. There is no connection between these two partners. Each also had a sole trader business that ceased during 2018-19. Both clients had the cessation of their sole trader business on their 2018-19 but crucially both have filed their 2018-19 and 2019-20 Tax Returns with ongoing partnership income. HMRC have ignored the ongoing partnership income and told the client:

'On your tax return for either 2018 to 2019 or 2019 to 2020 you indicated that you had stopped trading. This means you were not eligible to receive a grant and will need to repay the money you received.'

That is a false accusation. Neither of my clients have told HMRC they have stopped trading (their respective partnership income is ongoing). So both my clients are eligible for the grant.

One of the partnerships is VAT registered and HMRC are still receiving VAT returns so HMRC know the business is still trading well into 2020-21.

This is yet another HMRC IT fiasco.

Thanks (2)
Morph
By kevinringer
20th Nov 2020 10:49

What is the point of making a declaration to HMRC because clearly they don't take it seriously.

I have two clients (they're not connected) with ongoing trading income but both have received the emails telling them they have to act by 20 November. Both clients have filed their 2018-19 and 2019-20 Tax Returns. Both Tax Returns contain a declaration that the Tax Returns are complete, that both trades are ongoing. Both clients have claimed SEISS1 and SEISS2. When each client claimed each grant, each client had to make a declaration that they were still trading. That means each client has already made 4 declarations that they are still trading. Now HMRC wants them to make a 5th declaration. Hold on, if my clients have made false declarations HMRC should not give them another chance to get away with it, HMRC should be down on them like a ton of bricks. Telling the taxpayer they have to make a 5th declaration is crazy because after SEISS3 (by which time they will have made a 6th declaration) HMRC may decide to ask for the 7th, or 8th. When will HMRC be satisfied?

And in any case, if a claimant has made a false declaration, they'll have no qualms about making yet another false declaration.

HMRC need to get a grip, make use of data it already has and take action for what it believes are false declarations.

Thanks (0)
Morph
By kevinringer
20th Nov 2020 10:56

The problem is cases where HMRC have made false accusations against - those claimants who are still trading. What are they supposed to do? The email says take Action 1 or Action 2:

Action 1
If you did not trade in both tax years 2018 to 2019 and 2019 to 2020 and did not intend to continue your trade in 2020 to 2021:

Clearly Action 1 does not apply to those who are still trading. How about Action 2:

Action 2
If you did trade in tax years 2018 to 2019 and 2019 to 2020 and intended to trade in 2020 to 2021:
If you have not stopped trading and believe your SEISS grant was correct, you must:
• Make sure you are registered for Self-Assessment.
• Make a return by the filing date. Include SEISS grant as income.
• Go to gov.uk and search ‘Stopped trading SEISS’.
• Complete the on-line form.
• There is no need to provide evidence, but we may contact you at a later point to verify the information.

Action 2 tells the applicant to fill in the 'Stopped trading SEISS' form. But we're talking about claimants who are still trading - they have not stopped so why should they complete a form confirming they have stopped.

HMRC have made a right blunder with this one.

Thanks (0)
avatar
By AndrewV12
20th Nov 2020 12:59

Blimey, I just hope it does not apply to any of my clients one or two have de-requested for Vat.

Is there an appeals process?, Bad luck for the 1% who may miss out.
Its all a bit sneaky by HMRC, why not make the date after the 30th November after business have tried to claim, they may get an incite into the serious of the situation.

Lets hope all of us and our clients are okay.

Thanks (0)
Morph
By kevinringer
20th Nov 2020 13:05

Agents are not in the loop. The email is from HMRC to the claimant direct. In Wales the Welsh language half is first and most claimants will open it and conclude it's nothing to do with them because they don't understand Welsh. I suspect many recipients don't appreciate the significance of the email or assume their accountant will handle it, unaware that the accountant knows nothing about it.

Thanks (0)
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By Lyndaw
20th Nov 2020 14:39

What happens if you have a sole trader client who has claimed SEISS 1 and 2 , was trading in 2018/19 and 2019/20 and for commercial reasons wishes to transfer to a Limited company in December 2020. Will HMRC come looking for the SEISS back in the future saying they are no longer trading ? When is ceasing to trade applicable. When he made the SEISS claims 1 and 2 he was intending to trade and actually has traded for 9 months in 2020/21 but circumstances change.

Thanks (0)
Replying to Lyndaw:
Morph
By kevinringer
20th Nov 2020 15:20

Your client was trading and continuing to trade when SEISS1+2 claims were submitted. They wouldn't be able to claim SEISS3.

Thanks (0)
Replying to Lyndaw:
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By Paul Crowley
20th Nov 2020 18:22

Not the best decision
No support

I have had 2 decide that direction and told them stay put

Thanks (0)