Penalties for over-claimed Self-Employed Income Support Scheme Grants

HMRC is reminding sole traders and partners who have received Self-Employed Income Support Scheme (SEISS) grants that there are potential penalties of up to 100% of amounts over-claimed in certain circumstances.

HMRC may apply the penalty where they believe that the sole trader knew that they were not entitled to the grant and did not tell HMRC within a 90-day notification period. The law treats the failure as ‘deliberate and concealed.’ This means HMRC may charge a penalty of up to 100% of the amount of the SEISS grant that the sole trader was not entitled to receive or keep.

Sole traders and partners are required to notify HMRC if there is an amendment to any of their tax returns on or after 3 March 2021 which either:

• Lowers the amount of the fourth or fifth grant they are eligible for.
• Causes the sole trader to no longer be eligible for the fourth or fifth grant.

If the tax return was amended before claiming the fourth or fifth grant, sole traders had to tell HMRC within 90 days of receiving the grant. If the tax return has been amended after receiving the fourth or fifth grant, sole traders must tell HMRC within 90 days of the amendment.