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HMRC explains SEISS grant tax return errors
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HMRC addresses SEISS grant data concerns

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HMRC has come back to AccountingWEB about recent problems raised by AccountingWEB members over erroneous SEISS figures appearing in taxpayers’ online accounts.

9th Sep 2021
Editor in Chief AccountingWEB
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The inflated SEISS figures that appeared on pre-populated tax returns in commercial software arose from a mid-August application programming interface (API) update that displayed SEISS grant values in pence rather than pounds.

These APIs are designed to pass data between HMRC’s central computers and commercial tax applications and should mirror the information displayed in the taxpayer’s online account. While the updated API went through HMRC’s end-to-end testing process, there was a misunderstanding among the testers about how the data would be formatted at different stages of the process, the department said.

By the end of the last week in August, HMRC had fixed the formatting error. But as it made clear in messages to software developers and media during August, the self assessment computers would continue to correct returns if the amount of SEISS grant entered did not match its records.

This aspect of the department’s handling of SEISS grant figures continued to cause trouble for taxpayers and agents.

Double counting SEISS figures

AccountingWEB member paulhelliker raised an issue where it appeared the self assessment computers were taking the SEISS grant figures entered correctly in box 27.1 of TaxCalc’s personal tax program. But in five separate cases, HMRC’s calculation appeared to have added the SEISS grant into the profits and then brought the same SEISS figure back into box 27.1.

HMRC was not in a position to discuss specific examples based on what has been published on AccountingWEB, but indicated that it was not aware of this duplication issue.

Yet DavidAWilks commented on last week’s news report that he also had a case where an amended tax calculation was sent claiming an underpayment of tax because the SEISS information on the tax return did not match “the figure we hold”.

The AccountingWEB member continued: “No details as to the figure HMRC are holding and when I contacted HMRC on the dedicated line the operative had no idea either. There was just a note of the amendment on my client's record,” he wrote.

Tax department perspective

HMRC sources confirmed that in many instances 2020/21 tax returns have been submitted with incorrect SEISS grant figures, or the information has been entered into the wrong field, such as the “Any other income” box.

To deal with these situations HMRC added an automatic check on returns filed after 19 June that corrects any figures that do not align with the records it holds.

Taxpayers and their authorised agents will be informed when their return is corrected with a statement of account explaining what was corrected and why, the department said.

The department added that any corrections should be checked to ensure the individual was not being taxed twice for their SEISS grants. Detailed instructions on how to check the adjustment are available on HMRC’s website.

Are you one of those tax advisers who has encountered anomalies in the SEISS grant totals on clients’ tax returns? Make sure HMRC knows how widespread the problem is by sharing your experiences below.

Replies (2)

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Morph
By kevinringer
09th Sep 2021 13:01

HMRC and IT do not mix. This is just one API. Just image the chaos when MTD ITSA starts with its dozens of APIs. And it isn't just HMRC that have made a mess of this. PTP and Iris still doesn't download the SEISS at all and Wolters Kluwer puts it in the SEISS overpaid box.

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All Paul Accountants in Leeds
By paulinleeds
09th Sep 2021 13:05

I wrote to my MP regarding how HMRC were being extremely slow to deal with CIS tax refunds etc where clients had received SEISS grants. The reply from HMRC is shown below. I've slightly updated the text to remove names and privacy data. Hope it is of use to some of you.

Dear MP

Thank you for your letter of 26 July 2021 on behalf of your constituent about processing Self-Assessment returns where a customer has received a Self-Employment Income Support Scheme (SEISS) grant. I am replying on behalf of the Chief Executive as I have responsibility for this policy area.

We have received 2020-21 tax returns where SEISS grants were not reported in the way we expected. For example, the amount of SEISS grant(s) reported did not match the figure we paid a customer, or SEISS grants have not been included in the correct box on the return.

We have now improved our processes and any returns received on, or after, 19 June have been automatically checked by our system, with the SEISS grant figure changed where necessary. For returns received before 19 June we need to correct these manually.

We are working hard to process them in the order they were sent to us.

You ask that we should process all tax returns submitted by authorised tax agents (accountants) as these should have been submitted with the SEISS grants included. I understand the frustration and the impact of these delays, which is why we are processing them as quickly as possible. We do need to check all returns where the SEISS grants have been reported in a different way than we expected, even when submitted by a tax agent.

There is support for customers facing financial hardship due to the delay, and anyone in this situation should call us on 0800 024 1222 to speak to an advisor.

I understand your concern that SEISS grants could be taxed twice, which is why are sending customers a statement of account which explains what we have corrected and why. We will also send this to their agent. Depending on the changes made and how the customer initially completed their return, customers may need to submit an amended tax return to make sure they pay the right amount of tax. It is important the customer checks any adjustment and statement of account to make sure they are accurate.

To make it easier for customers to make changes to their tax returns, we have recently updated our Business by Telephone direction and are now able to process amendments to SEISS grant entries over the phone. Authorised agents can also make these amendments by telephone, on behalf of their clients.

You can find further information on how to check the adjustment, and any next steps required, at
www.gov.uk/guidance/check-if-you-need-to-change-your-self-assessment-ret...

Paul Riley
Director

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