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HMRC confirms penalties for SEISS abuse

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Ahead of the upcoming fourth round of the Self-Employment Income Support Scheme (SEISS), HMRC has revealed the penalties that it will charge for those that abuse the scheme.

In updated guidance, HMRC revealed the protocol for freelancers who had been overpaid on their SEISS grants. According to the guidance, those who have overclaimed must notify HMRC within 90 days of receiving their grant.

HMRC said: “We understand that mistakes can happen, particularly in the present circumstances. We’ve made it as easy as possible to pay back any amounts of SEISS grants you’ve received that you were not entitled to. If you received too much because you made an error in a claim, you must pay this back to us.”

In instances where the recipient did not intentionally overclaim, HMRC will not enforce any fines as long as overpayments are repaid by the end of January next year. However, it has said that it can charge penalties up to 100 per cent of the amount overpaid.

The Treasury stated: “If you knew you were not entitled to your grant and did not tell us in the notification period, the law treats your failure as deliberate and concealed. This means we can charge a penalty of up to 100 per cent on the amount of the SEISS grant that you were not entitled to receive or keep.”

“If you did not know you were not entitled to your grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022.”

HMRC has also issued a new warning regarding scams circulating in relation to SEISS, some of which seek to induce freelancers into making erroneous claims. These often take the form of phishing scams which tell recipients they are eligible for a fourth SEISS grant.