HMRC sets out penalties for abuse or misuse of the SEISS scheme

HMRC have now confirmed the penalty regime for abuse of the SEISS financial support for self-employed persons.

An overclaimed SEISS grant includes any amount of grant which the self-employed person was not entitled to receive or was more than the amount HMRC said the applicant was entitled to when the claim was made.

Overpayments must be notified to HMRC within 90 days of receipt of an SEISS grant.  Penalties can be charged up to 100% on the amount of SEISS grant overpaid, but there is a fairly long period for repayment so, as long as overpayments are settled by the end of January 2022, fines will not be enforced.

When deciding the amount of any penalty, HMRC will take account whether the taxpayer knew they were entitled to the SEISS grant when they received it, and when it became repayable or chargeable to tax because the individual’s circumstances changed.

The HMRC guidance states: ‘If you knew you were not entitled to your grant and did not tell us in the notification period, the law treats your failure as deliberate and concealed. This means we can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep.

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

The penalty regime is set out in HMRC guidance, Compliance checks series – CC/FS47.