HMRC starts to assess grant overpayments
HMRC is currently writing to taxpayers that need to repay some or all of their self-employment income support scheme (SEISS) grants. What's the full story and what action needs to be taken on receipt of such a letter?
The fourth and fifth SEISS grants were calculated based on tax return information HMRC held on 2 March 2021, including the 2019/20 tax returns where these have been filed, along with any amendments made prior to that date. However, where amendments were made after this date it is possible that the entitlement to those grants would have reduced. For example, where the tax return was originally filed using estimated figures that were later corrected and the true figures were better than anticipated.
Amendments can be made by the individual taxpayer, directly by HMRC, or as the result of an enquiry. If the entitlement to the fourth and fifth grants was reduced by more than £100 as a result of the amendment, the taxpayer should expect a letter from HMRC very soon. This will contain an assessment of the amount that needs to be repaid, along with a breakdown of how that amount has been calculated. The letter will have a reference number and needs to be used to make the payment. The payment should not be made via the self-assessment account, and instead the instructions here should be followed. If payment is not made within 30 days, a 5% penalty will be applied unless a time to pay arrangement is set up before that deadline. It is possible to appeal in writing within 30 days of the date on the letter.
Related Topics
-
Payroll changes for 2026/27
As the end of 2025/26 draws closer, HMRC has published a raft of updates and reminders for employers. Which changes do you need to be aware of that might impact your payroll in 2026/27?
-
Can you beat the bonus tax trap?
A fellow director has asked whether his bonus payment can be delayed until after 5 April 2026 to reduce his personal tax bill. Does his plan work and, if so, how does it impact the company’s tax position?
-
HMRC publishes penalty guidance for MTD IT
HMRC has published guidance on how penalties will apply under Making Tax Digital for Income Tax (MTD IT). With mandation approaching from April 2026, what do you need to know about the new regime?