HMRC publishes guidance on penalties for incorrect claims under SEISS


Alexandra Docherty

Alexandra Docherty

Tax Partner


HMRC has recently published guidance detailing the steps to take if you have incorrectly applied for and received a grant through the Self-employment Income Support Scheme. The guidance sets how HMRC assess and penalise self-employed workers who have claimed a grant they’re not entitled to.

We would urge you all to read this guidance in full, if you have made a genuine error, there are steps you can take to rectify it now.

I’ve summarised the key points for noting in this blog.

SEISS guidance - what you need to know

  • You’ve received a grant you’re not entitled to

If person has been paid a grant which they were not entitled to and have not repaid it, they should notify HMRC within the notification period. The notification period ends on the latest of:

  • 20 October 2020
  • 90 days after you receive the grant

Once notified, HMRC may make an assessment for the amount, and this needs to be paid within 30 days. Late payment penalties will apply where payments are not made within this timeframe.

If the assessment has not been made by the time the 20/21 return is completed there will be a facility to add it in the tax return.

  • Penalties

Penalties may be charged if it is known that the grant claim was ineligible, and HMRC is not notified within the period above.

  • Genuine errors

If it is an innocent error, and the person is not aware that they should not have claimed, additional penalties will not be charged as long as the amount is paid by 31 January 2022. Otherwise, the usual failure to notify penalties apply. The failure will be treated as  deliberate and concealed for claims that were known to be incorrect.

  • How it applies to partners

Where partners in a partnership claim the grant but retain it personally, then the rules above apply for this partner as a sole trader.

Where the grant is paid it into the partnership, any partner may be assessed and suffer penalties. If any of the partners repays the amount by 31 January 2022, no penalty for failure to notify will be charged.

New child in 2018/19

HMRC has also updated their guidance on what to do if your 2018/19 trading profits were affected or a return was not submitted due to having a new child in that year.

Having a new child is either:

  • Being pregnant
  • Giving birth (including a stillbirth after more than 24 weeks of pregnancy) and the 26 weeks after giving birth
  • Caring for a child within 12 months of birth if you have parental responsibility
  • Caring for a child within 12 months of adoption placement

In addition to the above, you must have been self-employed in 2017/18 and meet all the other eligibility criteria. To make a claim visit the Government’s website and fill out the online form to verify your details. HMRC will then check and confirm eligibility. Once you have confirmation from HMRC you can make a claim from 17 August.

Get in touch

If you have any questions about the SEISS scheme, please do not hesitate to contact me, Alex.Docherty@jcca.co.uk or your usual Johnston Carmichael adviser.