SEISS Penalties

SEISS Penalties

posted on October 5, 2020

by: Ian Marlow / 0 comments / Self-Employment

HMRC announced in July how they were going to penalise taxpayers who misused the SEISS grant. They are asking people to take a close look at the claim they made and review whether the claim was either appropriate or excessive and whether any SEISS penalties are due.

Should you have received a grant to which they were not entitled, HMRC needs to be notified by the later of:

  • 20 October 2020
  • 90 days after they received the grant

Payment of the outstanding balance of any amounts overclaimed has to be made  by 31 January 2022. Recovery of the amount overpaid may be either by assessment, voluntary repayment or on your 2020/21 income tax return.

The HMRC guidance on SEISS penalties suggests that claimants who knew they were not entitled to the grant, might automatically being treated as having deliberately and concealed the failure, giving a starting penalty of 100% of the grant paid out. Nevertheless, there does look to be an escape route from the potential SEISS penalties in the second condition quoted from the guidance as below.

  • If you knew you were ineligible for the grant when you received it, any penalty will be based on the amount you were not entitled to receive and did not repay by the last day of the notification period.
  • If you did not know you were ineligible for the grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022

If you do think you have overclaimed then it is very important that you any claims and payback anything overclaimed within the time limits. Prompt action is important if you are to avoid SEISS Penalties.

Alternative Text

Ian Marlow

Managing Director

Ian Marlow, an Elite Advisor for Quickbooks Online, has a passion for helping individuals and businesses in all aspects of online accounting and leads an experienced team of tax and accounting professionals.
5th October 2020
Top read posts


HfM Tax & Accounts Winner 2019 - HfMTax.
Personal Tax Returns Adviser of the Year 2018 - HfMTax.
2016 Tax Awards Winner - Best UK Personal Tax Service Provider 2016