HMRC has started to autocorrect 2020/21 tax returns where the SEISS grants reported do not match its records and has restarted pre-claim checks in advance of the fifth grant. ICAEW’s Tax Faculty has the latest information.
SA tax return corrections
Previously, the faculty explained why some 2020/21 self assessment (SA) tax returns filed by those who have claimed self-employment income support scheme (SEISS) grants have not yet been processed.
On 19 May 2021, HMRC introduced a fix to prevent some returns from being incorrectly flagged as potentially erroneous.
From 19 June 2021, HMRC has started to automatically correct 2020/21 returns where the information reported on SEISS grants does not match HMRC’s records. HMRC will issue a revised SA302 calculation showing the correction and is also developing further communications for those affected. Returns received before 19 June will need to be corrected manually by HMRC and may take some time to clear.
The different scenarios and required actions by taxpayers/agents are as follows:
- Grant omitted from the return – accept HMRC’s correction if the SEISS grant figure is correct, otherwise contact HMRC to dispute the amount of the correction.
- Grant was reported on the return but in the wrong box – accept the correction and amend the return to remove the grant from where it was erroneously included.
- Grant amount reported does not match HMRC’s records – check against records and either accept or dispute the correction.
- No grant was received – this may suggest that a grant was claimed fraudulently using the client’s personal details, contact HMRC on 0800 024 1222.
- Return does not include self-employment or partnership pages – HMRC will interpret this is as a cessation of trade and correct the return to recover the whole of the grant on the basis that the client was not entitled to claim.
If the taxpayer or agent has submitted an amendment prior to 19 June, HMRC will make the correction to the original return rather than the amended one.
On 2 July, HMRC published guidance on when taxpayers may need to make a change to their self assessment return for SEISS payments and how to do it.
- HMRC guidance: Check if you need to change your self assessment return for SEISS.
- TAXguide 12/21 COVID-19 support grants tax considerations | ICAEW
In advance of claims for SEISS 5 grants opening in late July, HMRC is writing to a further 27,000 taxpayers who started trading in 2019/20 to ask them to confirm their identity and provide evidence of trading. The checks are the same as those carried out in advance of SEISS 4. The faculty understands that HMRC did not have time to contact all 100,000 cases that were originally identified for SEISS 4 and the 27,000 are some of those who were not previously contacted.
The direction (legislation) and guidance for SEISS 5 is expected by the end of June. Join the ICAEW’s webinar on SEISS grants on 20 July 2021 SEISS the fifth grant (icaew.com)
ICAEW Know-How from the Tax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
- 05 Jul 2021 (12: 00 AM BST)
- Updated to add link to new HMRC guidance on checking whether self assessment returns need to be adjusted in light of SEISS payments.