Self-employed individuals, and employers, have 90 days to inform HMRC that they have over-claimed the SEISS or CJRS grants and repay any excess before penalties apply.
Any incorrect CJRS grant claims in which the employer has overclaimed the amount due can be corrected in a later CJRS claim. If the employer has submitted their final CJRS claim there is a facility to repay HMRC online which has been in place since 26 June.
If the employer has under-claimed the CJRS grant, the extra amount of grant due needs to be set-up directly by HMRC, and the employer should not adjust the amount claimed in a later CJRS claim.
A CJRS grant should be repaid to HMRC if the funds were not used within a reasonable period to reimburse the employer’s costs relating to furloughed employees, such as furloughed wages, employer’s class 1 NIC and employer’s contribution to a workplace pension.
The self-employed income support scheme (SEISS) has always lagged behind the furlough grant scheme (CJRS), and the applications for the second SEISS grants will open on 17 August.
The HMRC guidance says it will work out if the trader is eligible for a SEISS grant and contact them to invite them the trader to apply. However, HMRC can’t check the three current-period conditions for the SEISS grant:
- Whether the trade has been adversely affected by the coronavirus pandemic
- If the individual traded in 2019/20 (if the tax return for that year hasn’t been submitted)
- Whether the trader intends to continue to trade in 2020/21
If any of those conditions are not met the SEISS grant has been incorrectly claimed, the trader needs to tell HMRC as soon as possible and repay the overpaid amount.
You can’t tell HMRC about the overclaimed grant on behalf of your client, as the disclosure must be made using the same government gateway user ID and password that was used to claim the original SEISS grant.