Following an investigation from consumer finance website MoneySavingExpert, tax authority HMRC has admitted that a processing error led to thousands of self-employed workers who received emergency grants during the COVID-19 pandemic being charged incorrect tax bills.
The investigation was initiated after a number of people voiced concerns on social media. People affected said that, when attempting to file their tax returns, HMRC automatically inputted incorrect figures for the amount given to them under SEISS.
The figures automatically put in were often larger than the amount that the worker received in grants from SEISS and led to many of those affected receiving larger than expected tax bills, calculated on incorrect income figures.
After the MoneySavingExpert investigation came to light, HMRC admitted that a system error had caused the issue and said that the fault had been fixed. According to HMRC, the issue meant that SEISS grants from the previous tax year were incorrectly included in the calculation.
The tax authority said that entries for SEISS grants between April 6 2021 and April 5 2022 were now being entered correctly. HMRC added that some tax returns had been manually amended to reflect the correct SEISS amounts received.
An HMRC spokesperson commented: “Our system has been designed to automatically check the box specified for SEISS grants. If there is a discrepancy between the amount a customer reports and the amount of grant they were paid, we automatically amend their return so it matches our records.”
“For a short period of time our system was incorrectly amending returns to include the amount received from the first, second and third SEISS grants [i.e. including grants from the previous tax year], instead of grants received between 6 April 2021 and 5 April 2022.”
