During the COVID-19 pandemic, the self-employed income support schemes (SEISS) were welcomed by recipients and distributed based on three conditions;

  • the company traded in 2019-20,
  • they intended to continue trading in 2020-21
  • and trade was adversely affected by COVID-19.

Now that business has mostly returned to normal, HMRC is beginning to examine the 2019-20 tax returns of those who received SEISS grants. This is to check whether their self-employed trade continued during that year.

What Does This Mean For SEISS Recipients?

If you claimed a SEISS grant but ceased trading permanently in 2019-20, the grant will need to be repaid as you would not have been eligible. Failing to repay grants later than 90 days after it was received may lead to a penalty.

For those who had a temporary break in trading during the pandemic but restarted the same or a different self-employed trade, the SEISS conditions for claiming would have still been met.

Taxpayers who took a break from self-employment due to maternity or adoption leave in 2019-20, on the other hand, will be treated as if they continued trading during this period.

How Will HMRC Be Contacting Recipients?

HMRC is now writing to SEISS claimants who;

  • have not submitted their 2019-20 tax returns
  • or submitted a 2019-20 tax return that does not include self-employed income

If you receive a letter from HMRC, you will have 30 days to submit or correct your 2019-20 tax return, as well as repay the SEISS you received in full. Our team are able to help with responding to HMRC, so please do not hesitate to contact us if you need support.