Claiming the SEISS grant has been a relative easy process and, for many, a most welcome hand-out to the self-employed in these difficult times.

Claiming the available grant for most individuals has been relatively painless with minimum time taken to complete the on-line process. However, it is very easy to overlook the implications of some of the wording in the Declaration. By claiming the grant you are stating that:-

  • The business had been adversely affected by the corona virus
  • The claim is made in accordance with HMRC’s published guidance
  • The claim is not based on inaccurate information
  • The claim is not fraudulent or abusive or made contrary to the purposes of the scheme

Having regard to the burden on the public purse, we can expect that HMRC will, in due course, subject the SEISS claims to significant scrutiny and therefore it is important at this stage to record appropriate evidence to substantiate any claim. Certain aspects may be perfectly clear but other aspects may be subjective and not so easy to demonstrate retrospectively without appropriate records.

The 2021 Self-Assessment Tax Return details will be the likely trigger information for any HMRC enquiries and the Inspector’s expectation is that self-employed income declared will be less than that of the previous year. If the profits are higher or similar to the earlier year, then this alone may be the grounds for unwanted enquiry from the Revenue.

The 2021 SA Tax Return does not need to be filed with HMRC until 31st January 2022 so enquiries by the Revenue into SEISS claims are unlikely to start until many months ahead giving greater need to record facts now when specific events and dates are fresh in the mind. So:-

  • Keep records demonstrating reduction in turnover showing variances with comparable trading periods (daily, weekly or monthly figures, as appropriate)
  • Retain confirmation of any coronavirus-related loans and details of any pressure on cashflow
  • Keep specific dates of when the business had to close due to lockdown restrictions
  • Keep specific dates of when the taxpayer or named members of staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities due to school closures.

Hopefully, your business will survive any financial difficulties caused by the pandemic  and will also avoid any later enquiry from HMRC, but being for-warned and prepared  is being for-armed.

Best wishes and stay safe and alert.

DAVID HODGSON, MBE, FCA

Read, Milburn & Co

Chartered Accountants

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