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New traders denied SEISS grant where no reply

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Individuals who started their business in 2019/20 need to provide additional evidence to HMRC in order to claim the self-employed income support (SEISS) grant, but complying won’t be easy for all.     

12th Mar 2021
Tax Writer Taxwriter Ltd
Columnist
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HMRC is writing to up to 100,000 self-employed traders asking them to confirm their identity and prove they have been trading before they can claim fourth SEISS grant. If the trader does not respond adequately to HMRC they won’t get the grant.

Only taxpayers who started trading as a self-employed business after 5 April 2019 will receive the SEISS verification letter from HMRC and we understand that only part of that group will be contacted.

Those new traders can claim support under the SEISS for the first time if they submitted their 2019/20 tax return by midnight on 2 March 2021.

Risk of fraud

As the next two SEISS grants will be wholly or partly based on the profits reported in the 2019/20 tax return, fraudsters have worked out that submitting a false return could result in a cash payment of up to £15,000 (maximum £7,500 for each grant). 

ATT Technical Officer Emma Rawson commented: “It is understandable that HMRC have concerns around fraudulent claims and the potential for tax return data to have been manipulated to maximise grants.”

This is why the tax authority is asking new traders in particular to complete a pre-verification check.

Seven steps to claim

To complete the pre-verification check and to access the next two SEISS grants the taxpayer will have to complete all of these steps:

Step 1: Open the letter

Receive and read the HMRC letter which should arrive between 10 March and mid-April.  The list of genuine HMRC contacts has recently been updated to include reference to the SEISS letter to first time tax return filers, so this might provide some comfort to taxpayers that the HMRC letter should not be ignored.  

Step 2: Answer call from HMRC

Up to two weeks after the letter is sent an HMRC officer will call the contact number given on the taxpayer’s 2019/20 tax return. If the agent’s number was shown as the contact point HMRC will ask the agent to pass on their client’s telephone number.

The taxpayer needs to answer HMRC’s call although it will be shown as coming from an “unknown number”.

HMRC will make only three attempts to call between 8am and 5.30pm. If none of those three attempts are successful the taxpayer will have failed the pre-verification. It is therefore essential that HMRC has the taxpayer’s correct telephone number.

The taxpayer can correct the number held by HMRC by calling: 0800 024 1222. This number is only set up to update taxpayers’ telephone contact details; the call-handler can’t deal with further queries about the SEISS.

Step 3: Supply email address

When the taxpayer does speak to HMRC they must confirm or supply their email address. They must also agree to receive a link to a Dropbox account to that email address.  

Step 4: Find email from HMRC

The taxpayer must receive and open an email from HMRC that includes the Dropbox link. This is another point where the system could break down, as the HMRC email could easily be automatically sent to the taxpayer’s junk folder.  

Step 5: Digital copies

The taxpayer needs to make digital copies of a form of their ID (eg their photo-card driving licence, or current passport) plus three months of their UK business bank statements from 2019/20. This information is needed to demonstrate that the new business has been active in 2019/20.

If the business has been run without a UK bank account HMRC will accept other documents, but the taxpayer must agree what is acceptable in their call with HMRC.  

Step 6: Upload documents

Taxpayer has only two days to upload the digital copies of their ID and bank documents to the HMRC Dropbox. After two days the Dropbox link will expire and the taxpayer will fail the pre-verification. 

Step 7: Apply for the grant

The online portal to apply for the next SEISS grant will open in late April, HMRC hasn’t confirmed exactly when. All the above steps need to be completed before the taxpayer attempts to claim the SEISS grant. Tax agents cannot claim SEISS grants on behalf of their clients.  

Profession has concerns

The ICAEW Tax Faculty anticipated that digitally excluded taxpayers and many others will have difficulty completing these verification checks. The Tax Faculty is in discussions with HMRC about how these checks can be made more inclusive and how taxpayers can be reassured if they receive the phone call from HMRC before the letter arrives.

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Replies (32)

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By memyself-eye
12th Mar 2021 16:47

Talk about 3 steps to heaven - this feels like seven steps to hell!
I suppose HMRC has to be cautious, but many, many new traders won't have a clue how to negotiate this.
Ah well, 19 days to go.

Thanks (4)
Replying to memyself-eye:
My photo
By Matrix
12th Mar 2021 23:11

I doubt any of my trader clients, old or new, would manage this.

However some traders must now have GG accounts which I never thought could be possible, so will see.

Can we have a party to celebrate your retirement?

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Replying to Matrix:
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By memyself-eye
14th Mar 2021 08:23

Certainly - how good are you at steering canal boats?

Thanks (0)
Replying to memyself-eye:
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By Paul Crowley
13th Mar 2021 17:43

Agree
They are new traders
Most of my small clients just would not cope.
Biggest issue is a 48 hour expiring drop box. Outrageous

There is the first problem of course
getting clients to open an HMRC buff envelope on the day it arrives

Thanks (6)
Replying to Paul Crowley:
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By memyself-eye
14th Mar 2021 08:22

Maybe if the enveloped announced "You have won the lottery - claim now!"

Thanks (4)
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By Paul Crowley
14th Mar 2021 20:48

Maybe I misunderstand
But I thought these People jump the queue and the call also asked the relevant questions for SEISS claim

https://www.icaew.com/-/media/corporate/files/insights/tax-news/seiss4-p...

Copy of draft letter
See s4

https://www.accountingweb.co.uk/any-answers/hmrc-verification-check-seis...
Other existing comments on this issue

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By jamiea4f
15th Mar 2021 09:41

Just like to know where all these HMRC officers are coming from seeing as there’s never anyone available when I call them. What a great idea it was to close all the local offices and put everything in a P.O. Box number, hope whoever thought of it got a knighthood/damehood....

Thanks (4)
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By monksview
15th Mar 2021 09:49

Most people will take this sort of call as being a scam so will fail at that stage. A large proportion of the rest will have no idea how to operate dropbox, I find it clunky at the best of times. So another nail in the coffin of the newer sole traders, I can see a high % of them failing yet again to receive any support.

Thanks (2)
Replying to monksview:
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By raju m
15th Mar 2021 10:50

HMRC's general hope is for low claims rate!!!!

Thanks (1)
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By [email protected]
15th Mar 2021 09:58

Wow - serious concerns here for both my non-digitally minded clients and influx of scammers.
Guessing the scammers are clever enough to get their hands on these details.
Perhaps HMRC will involve an offshore call centre in the absence of HMRC officers.

Thanks (1)
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By [email protected]
15th Mar 2021 09:58

Wow - serious concerns here for both my non-digitally minded clients and influx of scammers.
Guessing the scammers are clever enough to get their hands on these details.
Perhaps HMRC will involve an offshore call centre in the absence of HMRC officers.

Thanks (0)
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By johnjenkins
15th Mar 2021 10:22

I suppose the easy answer is to contact the clients agent. Toooo simple?

Thanks (3)
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By Truthsayer
15th Mar 2021 10:23

'Step 1: Open the letter'

Many will fail even here.

Thanks (3)
Replying to Truthsayer:
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By johnjenkins
15th Mar 2021 10:46

Many a true word spoken in jest.

Thanks (0)
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By AndrewV12
15th Mar 2021 10:29

Seven steps, its not what you want, but there could be a pot of gold at the end off the rainbow.

Thanks (0)
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By Homeworker
15th Mar 2021 10:30

Thanks for the heads up. I think this is outrageous and likely to result in most of these new businesses being excluded. It is far too complicated. I tried using dropbox myself and gave up on it.

Thanks (4)
Chris M
By mr. mischief
15th Mar 2021 10:34

Considering VAT has been down all this morning, what can possibly go wrong with a 2-day Dropbox window?

HMRC were rubbish when I set up in 2009. Somehow over the years they've managed to get worse. Dismal dismal dismal. An example from January:

Me
"This £10k corporation tax refund of £10k was submitted in June. I chased it in October and November and was told it would be done within 2 weeks both times."
HMRC
"I will put it on a worklist. It's been very challenging for us dealing with Covid 19, scheduling staff and homeworking."
Me
"I am sitting here WITH Covid 19. All my family have it too. Despite occasional brain fuzz I have not used Covid 19 as an excuse with a single client. Whilst it was OK to be dealing poorly with Covid changes in, say, June 2020, that is just not a valid reason any more, just an excuse,"
HMRC
"HMRC has found it all very challenging. I have put it on a worklist."

STILL NOT DONE. 8 MONTHS LATE. Dismal, dismal dismal HMRC.

Thanks (5)
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By Ian McTernan CTA
15th Mar 2021 10:47

It's almost like someone in an ivory tower thought this system up.
So many points of failure.
Three tries from 'unknown number'= fail there, most won't answer, even if they do, unlikely to give information.
Dropbox? Who are they kidding? 48 hour expiry? Bank statements, etc.
HMRC are assuming everyone has immediate access to this information and is digitally literate- which is far from the case with many of the self employed.
Expect big mess.
Oh and of course once again agents are excluded and the Institutes fail, merely picking at the edges and asking how these 'can be made more inclusive'...rather than shouting loudly from the rooftops and riling up MP's to actually get something done (wouldn't want to upset their chances of a gong now, would they...).

Thanks (4)
Replying to Ian McTernan CTA:
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By raju m
15th Mar 2021 10:57

Only people who will successfully receive the grants money are likely to be the clever fraudstars. Genuine traders will mostly fail to receive any money. Tragic!!!!!!!!!!!!!!!!!

Thanks (1)
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By RG
15th Mar 2021 11:38

I am appalled by Step 2: Answer call from HMRC: HMRC will make only three attempts to call between 8am and 5.30pm.
I have an osteopath client who is working reduced hours and should be eligible, but will not be able to take calls during treatments. What happens if he has the bad luck to be called during these times?

Thanks (1)
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By djames
15th Mar 2021 12:12

You couldn't make this up. HMRC have dropped to a new level of being totally out of touch, moving from planet Daydream to planet Tripping before, inevitably, their next move to Planet Overdosed.

Do they realise how many people do not answer unidentified calls? I myself don't answer unidentified calls on my mobile. All clients are in my phone book and if someone else wants to get in touch then they can leave a message or text. HMRC themselves would probably fail the verification with the number of times you get cut off when they are busy eating doughnuts or whatever it is they do at the call centres.

I'm sure the Government's intention was that these grants go out to the people who need them. Yet HMRC are determined to stop as much of it going out as possible by clogging the system with unnecessary red tape.

I'm currently in the middle of an HMRC 'enquiry' regards a client's furlough claims. Two directors running a garage, who have genuinely either been off or only partially working for a whole year and claimed less than £6k in total (£3k each) for the year (mainly in flexible furlough). The 'enquiry' has dragged on for 8 months, they've repeatedly asked for stuff within tight deadlines (of 2 weeks) whilst taking 2 months or more to reply, and now they're asking for more 'evidence' despite us supplying everything they've asked for. Their time on this case must add up to more than the total furlough claimed by this client. The client is pretty annoyed to say the least.

HMRC is doing the absolute minimum to help taxpayers, despite that being the intention of the Government, and it needs a complete overhaul from top to bottom.

Thanks (2)
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By cunninghamat
15th Mar 2021 13:05

What a crazy system. I have told my clients who have been receiving spam calls purporting to be from HMRC that the Taxman does not phone them, now this? Asking for problems from step 1.

Thanks (1)
Chris M
By mr. mischief
15th Mar 2021 14:22

One of the best things about the original schemes was the speed they came in at. So the utter prats at HMRC did not have the time needed to put all sorts of daft things into the system. Based on that, maybe instead of delaying the utterly stupid Making Tax Daft we should have encouraged them to do it in 2 months flat instead.

Thanks (1)
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By spuddle
15th Mar 2021 14:41

Is the use off Dropbox GDPR compliant? I thought there were serious doubts about that and stopped using it for that reason.

Thanks (1)
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By [email protected]
15th Mar 2021 17:12

Why can’t HMRC send a message to the traders Gateway account ?
Surely HMRC should identify themselves with a code such as the last 5 digits of the traders UTR or the like.
There is no way to know that this isn’t a scam.
You get an unidentified number phoning you, probably asking you to confirm your UTR and date of birth. Then they tell you where to upload your bank details and personal ID.
It’s a scammers paradise!

Thanks (3)
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By [email protected]
16th Mar 2021 09:04

How about HMRC apply some 2 way security when they make the phone call.
HMRC confirm the last 5 digits of the traders UTR and the trader confirms the first 5 digits.
Then both parties know that it is a genuine call!

Thanks (0)
Replying to [email protected]:
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By prospera
16th Mar 2021 10:35

Absolutely agree it needs security. But how many people would know their UTR while answering the phone? Even if they answered the unknown number...

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Replying to prospera:
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By [email protected]
16th Mar 2021 11:42

But that's the point.......they would have had a letter previously advising them to expect the phone call
If the letter stated that the caller would identify themselves by giving them part of the UTR number then they would know it's genuine

Thanks (1)
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By Pam Moreland
17th Mar 2021 08:05

Any idea what will happen to those who missed the 23.04.20 deadline for the 2018-19 return? I have just brought a new client right up to date (he was effectively abandoned by his previous accountants who said they were too busy to get the 2019 return in last year). No chance of grants 1,2 & 3 (I have tried via a complaint) but he is eligible now. Will he be contacted? Who knows?

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By markmorley
17th Mar 2021 09:31

I appreciate their trying t0 avoid the "normal" months of delayed correspondence action but this is madness. After publishing hmrc will never ask you for your personal details to combat fraud their giving the perfect format for fraudsters to get downloaded copies of individuals digital data in double quick time . All they have to say is this is hmrc (leave out your going to prison ) we have widened the net of grant enquiries and you'll loose money if you don't act now . give us all your id and bank details now ?

cant they try the same id procedures professionals have to ?

as a practitioner currently receiving intermittent postal service to the office do we call the pi firm now ?

M

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Chris M
By mr. mischief
17th Mar 2021 15:45

I have now been able to submit my MTD returns at 1540 on Wednesday 17 March. I began trying at 0630 on Monday 15 March. So that is about 57 hours the server has been down.

So it seems to me that one of the following is true of the SEISS system people with their 48 hour Dropbox drivel:

1. They are so utterly clueless about how HMRC operates they don't realise it is pretty routine to be locked out of their rubbishy databases for days on end.

2. They fully realise how rubbish HMRC systems are, and have deliberately designed the new SEISS system to be virtually impossible to claim on.

Whichever one of these is true, this whole thing sums up my experience of dealing with HMRC these past 13 years. And they are getting worse consistently, year by year.

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By Diana Miller
08th Apr 2021 00:35

So if someone rings us claiming to be from HMRC I am just meant to give out client personal info over the phone to someone who could be just about anyone- Never.
We live in a rural area and clients are often uncontactable on mobiles during the day so will not be able to answer a call. Some don't have mobiles, quite a few don't have computers, let alone scanners. A few are not particularly literate but brilliant at the practical work they do. There is no way on earth some of my clients would ever cope with this. Digital exclusion is becoming more and more of an issue and is fundamentally wrong. HMRC may be anxious about fraudulent claims but they need to actually take some time to understand the taxpayers they are supposedly helping.

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