Penalties for over claiming SEISS and other support grants

Claims for the fourth Self Employed Income Support Scheme (SEISS) can now be made and must be claimed by 1 June 2021. At the same time, HMRC have issued updated details of penalties that may be imposed on those that have previously claimed too much. 

If you have over claimed a SEISS grant and have not repaid it, you need to notify HMRC within the notification period. The notification period ends on the latest of:

• 20 October 2020
• 90 days after you receive the SEISS grant you’re not entitled to

HMRC may charge you a penalty if you do not tell them within the notification period that you’re chargeable to Income Tax on an overclaimed SEISS grant.

When deciding the amount of any penalty, HMRC take account of whether you knew you were entitled to the SEISS grant:

• when you received it
• when it became repayable or chargeable to tax because your circumstances changed

If you knew you were not entitled to your grant and did not tell HMRC within the notification period, the law treats your failure as deliberate and concealed. This means HMRC can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep. The penalty can be mitigated if the taxpayer assists HMRC in establishing the facts. 

If you did not know you were not entitled to your grant when you received it, HMRC will only charge you a penalty if you have not repaid the grant by 31 January 2022.

See: Penalties for not telling HMRC about Self-Employment Income Support Scheme grant overpayments - CC/FS47 - GOV.UK (www.gov.uk)

Other Coronavirus Support Grants Overclaimed

If you have received a coronavirus support payment that you are not entitled to, you must tell HMRC about this by the end of the notification period. If you do not do this, HMRC call this a ‘failure to notify’.

The notification periods are: 

Eat Out to Help Out Scheme – 90 days after the date you received the amount you were not entitled to

Coronavirus Job Retention Scheme – 90 days after the date you received the amount you were not entitled to, or after you ceased to be entitled to retain the amount you were paid, which could be because:

• • • of a change in your circumstances
    • you have not used the payment to pay the costs it was intended to reimburse, within a reasonable period of time (for example, to pay your staff) 

As with SEISS grant over claims, the maximum penalty could be as much as 100% of the amount of grant overclaimed. See HMRC guidance:

See: Penalties for not telling HMRC about coronavirus (COVID-19) support scheme overpayments - CC/FS11a - GOV.UK (www.gov.uk)