Overpayments of SEISS grants - HMRC update

HMRC have provided the following update on how they are recovering Self-Employment Income Support Scheme (SEISS) grants where a taxpayer needs to repay some or all of their grant.

Who HMRC are contacting

From April 2022, HMRC will be writing to taxpayers whose entitlement to the fourth and/or fifth SEISS grant has gone down by more than £100, asking them to repay the overpaid amount. HMRC will make it clear how they have worked this out and the steps taxpayers need to take.

If an amendment to their tax return has been made after 3 March 2021 for any of the years 2016-17 to 2019-20, which means they are no longer entitled to the amount they originally claimed for their fourth and/or fifth SEISS grant, they need to repay the amount they were overpaid.

If this has happened, HMRC will also look at their turnover figures if they claimed the fifth SEISS grant. If they are now eligible for the lower (30%) grant, but claimed the higher (80%) grant, HMRC will also ask them to repay the difference.

How can taxpayers pay back overpaid grants?

They’ll find everything they need online to help them pay the amount they owe. The taxpayer will need to use the payment reference starting with X on the Assessment they receive from HMRC. More details and instructions can be found at Pay taxes, penalties or enquiry settlements - GOV.UK (www.gov.uk).

What if taxpayers can’t pay straight away?

Although taxpayers may need to repay some money following an amendment to their tax return, HMRC understands that people may be struggling financially, and will support these taxpayers as much as possible. If a taxpayer is unable to pay in full, they may be able to set up a Time to Pay arrangement - spreading payments across a longer period of time - by contacting HMRC on 0300 322 9497. They’ll need to have details of their income and what they normally spend so HMRC can ensure any payment plan is affordable.

Can taxpayers appeal this?

HMRC calculate a taxpayer's grant based on information from their amended tax return. If they disagree with the figures provided, they can appeal. To do this they need to write to HMRC within 30 days of the date of their letter, telling HMRC why they think their decision was wrong.

Will taxpayers receive penalties if they don’t pay?

The letters to taxpayers will include the date by which the repayment must be made. A late payment penalty of 5% of the unpaid tax will be applied if the payment is over 30 days late. A further late payment penalty will be charged if any amount remains unpaid 6 months and then 12 months after the due date. If a taxpayer is unable to pay in full, they may be able to set up a Time to Pay arrangement - spreading payments across a longer period of time - by contacting HMRC on 0300 322 9497. If the taxpayer has set up a Time to Pay arrangement with HMRC, the late payment penalties will not apply.

Taxpayers will also have to pay late payment interest on any amounts still unpaid after 31 January 2023. After that date, HMRC will charge interest on a daily basis.

Can taxpayers use an agent to act on their behalf?

Yes, if an agent has the relevant authorisation to act on their behalf, they will be able to contact HMRC about their case and repay any overpayment. Taxpayers need to have completed a Form 64-8 to give authorisation to an agent. For further details, visit https://www.gov.uk/government/publications/tax-agents-and-advisers-authorising-your-agent-64-8

Where can taxpayers find more information?

For more information on repaying a SEISS grant visit www.gov.uk/hmrc/repay-seiss. Taxpayers will need to follow the instructions on the letter when making a payment. If the taxpayer has any questions or needs to contact HMRC to discuss their letter, they can call them on 0800 024 1222.

More information and FAQs on the SEISS grants can be found on our dedicated SEISS page here.

Checking whether HMRC contact is genuine

Taxpayers can check if contact from HMRC is genuine by visiting https://www.gov.uk/government/collections/check-a-list-of-genuine-hmrc-contacts.

HMRC advise customers take their time and check HMRC’s advice about scams on GOV.UK before they do anything. They can also phone HMRC directly, but make sure they use the contact details on GOV.UK.