COVID 19 - HMRC overclaimed notification – 90 days

31 July: Taxpayers who have received CJRS or SEISS grants have 90-day period to inform HMRC of any overclaimed amounts, by law.

HMRC now has power to recover Coronavirus Job Retention Scheme (CJRS), Self-employment Income Support Scheme (SEISS), Coronavirus Statutory Sick Pay Rebate Scheme and coronavirus business support payments grants to which the recipient is not entitled, as well as to charge penalties.

The onus is on the taxpayer to notify HMRC if they have overclaimed a CJRS or SEISS grant and this must be done within 90 days of receipt of the grant.

The penalty regime is based on the usual failure-to-notify penalties. If the taxpayer knew that they were not entitled to the grant at the time when they received it, the overpayment must be notified or repayment made in full by the end of the notification period.

HMRC may issue assessments to recover overclaimed grants. If that does not occur and monies were not otherwise repaid previously, then the overclaimed amount must be reported on the taxpayer’s income tax or corporation tax return and tax paid on time.

The key risks affecting SEISS grants entitlement are:

  • the trade was not adversely affected by coronavirus;
  • the trade did not continue in the tax year 2019/20 (eg, because the business was incorporated); or
  • there was no intention to continue to trade in the tax year 2020/21.
  • grants not used for the purposes for which they are intended;
  • calculation errors; and
  • employees working during periods that they are on furlough.

HMRC guidance: