In this week’s updates, HMRC emailed Chartered Accountants Ireland last week to say it has begun writing to certain taxpayers who may have received an overpayment of Self-Employed Income Support Scheme (“SEISS”) grants, the Administrative Burdens Advisory Board has opened a survey on how easy it was to follow the rules for COVID-19 supports administered by HMRC, employees are urged to check if they still qualify for relief for working from home in 2022/23 and HMRC’s guidance on tips has been updated to reflect the move to electronic payments during the pandemic.
HMRC begin to act on overpaid SEISS grants
The SEISS grant recovery provisions give HMRC the powers to recover a grant that an individual is no longer entitled to. If a taxpayer’s tax return for any of the years from 2016/17 to 2019/20 is amended on or after 3 March 2021 and they’re no longer entitled to the amount they originally claimed for either their fourth or fifth (or both) SEISS grants, they need to repay the amount they were overpaid by HMRC.
If a taxpayer has been overpaid on their fifth SEISS grant, HMRC will also compare the reference year (2018/19 or 2019/20) turnover figure they entered when claiming the grant, with the declared turnover figure on their latest tax return. If the figures don’t match and this means they received an 80 percent grant when they should’ve received a 30 percent grant, HMRC will ask them to repay the difference.
HMRC has started a process to recover these overpaid SEISS grants and is now contacting a small percentage of fourth and/or fifth grant claimants to recover these overpaid grants. HMRC is doing so by writing to taxpayers whose entitlement to those grants has been reduced by more than £100, asking them to repay the overpaid amount.
HMRC began dispatching assessments and explanatory letters from 22 April 2022 – meaning letters are expected to start landing on doormats from Wednesday 27 April. HMRC anticipates issuing the assessments over a 3-week period.
Although HMRC won’t be raising assessments to recover overpaid grants of £100 or less, claimants can use the voluntary repayment service if they wish to repay these sums.
HMRC is aware that many people are struggling financially, hence anyone in financial difficulty can discuss a payment plan with us by calling the Self-Assessment helpline on 0300 200 3822.
Administrative Burdens Advisory Board survey
Small businesses are invited to compete a short survey for the Administration Burdens Advisory Board. The survey concerns how easy it was to follow the rules for COVID-19 support grants administered by HMRC. The survey is open until Wednesday 4 May 2022 with results expected to be published in the summer.
Working from home tax relief
Employees who have been claiming the £6 per week working from home tax relief during the pandemic in 2020/21 and 2021/22 are urged to check their tax codes to for 2022/23 to see if HMRC has automatically included the relief in their tax code for the current tax year.
During the pandemic, this relief was available by concession to anyone who worked at home due to the pandemic and relief was provided for the full tax year irrespective of how many actual days the employee worked at home. However this relaxation ended on 5 April 2022.
Relief is only now available under the updated guidance rules which states that you cannot claim relief if you choose to work from home.
Electronic tips payments
Due to a move away from payment of tips in cash due to the COVID-19 pandemic, HMRC has now published updated guidance on the tax treatment of tips and related payments such as gratuities, service charges and troncs. The updated guidance includes details on how to handle electronic payments.
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