The fourth Self-Employed Income Support Scheme (SEISS) grant is now live and HMRC has set out the penalties for abuse of the scheme.

An overclaimed SEISS grant includes any amount of grant which the self-employed individual was not entitled to receive or was more than the amount HMRC said the applicant was entitled to when the claim was made.

Overpayments must be notified to HMRC within 90 days of receipt of an SEISS grant.

When deciding the amount of any penalty, HMRC will take account whether the taxpayer knew they were entitled to the SEISS grant when they received it and when it became repayable or chargeable to tax because the individual's circumstances changed.

The HMRC guidance states: '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% 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.'

If you would like further advice or require a compliance review on your eligibility, please contact us.

Internet link: GOV.UK publications