HMRC requiring repayment of SEISS Grants

Loboro

I have seen no details of this or any publicity but I am being told if you did not make an overall lower profit in the tax year 2020-21 you will be required to repay the SEISS grants you received, even though you may have struggled in the months the claims were made but been successful in securing new work later in the year.

Is this correct and has anyone else heard this information.  It seems exceeding unfair on the self employed - will HMRC also be reclaiming the furlough payments etc if companies have not made significant losses in the tax year?

onashoestring

HMRC website says “We expect to recover any SEISS payments you were not eligible for.”  

 It also says “ You must tell HMRC if, when you made the claim, you were not eligible for the grant. For example:

for the first or second grant, your business was not adversely affected

for the third, fourth or fifth grant, your business had not been impacted by reduced activity, capacity or demand or inability to trade in the relevant period

you did not intend to continue to trade

you’ve incorporated your business

• • amended any of your tax returns on or after 3 March 2021 in a way which means you’re no longer eligible or are entitled to a lower fourth or fifth grant than you received
  • made a mistake reporting your turnover in your claim for the fifth grant which means you are entitled to a lower grant than you received

Thrugelmir

Unfair on the taxpayer if the money wasn't required. 

Jeremy535897

This would amount to a retrospective change in legislation if true, and therefore it is either not true, or there is more to it than that. I could understand HMRC wanting to see supporting evidence of claims made where profits have gone up, and it was always made clear that keeping evidence was necessary. The bar for SEISS 1 and 2 was very low though, and the mere necessity to purchase PPE counted as an adequate reason to claim.

sheramber

who is telling you?

Grumpy_chap

Loboro said:

I have seen no details of this or any publicity but I am being told if you did not make an overall lower profit in the tax year 2020-21 you will be required to repay the SEISS grants you received, even though you may have struggled in the months the claims were made but been successful in securing new work later in the year.

Is this correct and has anyone else heard this information.  It seems exceeding unfair on the self employed - will HMRC also be reclaiming the furlough payments etc if companies have not made significant losses in the tax year?

Which SEISS grant do you refer to?  The criteria were quite different for the latter grants compared to the first grant, with the latter grants requiring an assessment with "reasonable belief" that business would be "significantly" impacted because of COVID.  

There was much discussion in these forums at the time about how "significantly" impacted was defined and could be measured, in the light of HMRC only having annual figures after the event.  There are some businesses where the "significantly" part is easy to demonstrate (closed restaurant) but many more trades where that is less clear-cut.

I suspect that, in most cases, a business that was "significantly impacted" in a three month period will also see reduced profits for the whole year.  It is not unreasonable that HMRC review some cases where all the grants were claimed yet profits are not impacted or even increased.  This type of verification is not the same as saying the grant will automatically be reclaimed.

There are plenty of businesses that will have been "significantly impacted" at grant 3 period but then boomed subsequently - it is practically impossible to get a tradesperson to do work at present.

MattMattMattUK

I know one person who has had to pay the grants back as he claimed them but was not eligible. 

Have you claimed the grants and you did not meet the criteria?