SEISS alert: HMRC issue warning on overpayments as self-employed numbers skyrocket

Martin Lewis grills Rishi Sunak over SEISS timetable

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SEISS support has helped millions of self-employed workers over the last year or so but despite this, the Government has been forced to alter the eligibility rules a number of times in the face of mounting criticism. With all these changes, the Government acknowledged claiming mistakes can happen but nevertheless, penalties can be issued.

Yesterday, HMRC released updated details and guidance on what may happen where grants are received by those who are ineligible.

Grants can be overclaimed and on this. HMRC detailed the following: “We understand that mistakes can happen, particularly in the present circumstances.

“We’ve made it as easy as possible to pay back any amounts of SEISS grants you’ve received that you were not entitled to.

“If you received too much because you made an error in a claim, you must pay this back to us.”

Those who have overclaimed a SEISS grant and have not repaid it must inform HMRC within the notification period, which is currently set at 90 days after one receives a grant.

HMRC warned it may charge a penalty if a claimant does not inform the Government within the notification period that they’re chargeable to income tax on an overclaimed SEISS grant.

It continued: “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 percent 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.”

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Despite the prolonged economic damage to the field combined with SEISS eligibility problems, self-employment itself appears to be on the rise.

New research from PeoplePerHour, the freelance jobs marketplace, showed more people have turned to freelancing alongside employee jobs during the pandemic.

PeoplePerHour detailed: “Nearly one in five freelancers (19 percent) are now self-employed as a side-hustle alongside an employee position.

“Nearly two fifths of these (37 percent) said they started freelancing in the last 12 months, suggesting a spike in the number of side-hustlers during the pandemic.

“Nearly quarter (24 percent) of those freelancers surveyed also said they had gone into self-employment to add to their main income.

“The research also suggests this trend will continue, with 98 percent of side-hustlers saying they plan to continue freelancing in some form.

“Of these, 13 percent said they planned to take their side-gig full-time, 22 percent said they planned to work part-time as a freelancer and 33 percent said they would continue freelancing alongside a full-time employee position.

“People’s motivations for taking up freelancing are overwhelmingly positive, with over half (55 percent) citing desiring greater flexibility and over two fifths (44 percent) saying they wanted to increase their income.”

Xenios Thrasyvoulou, the founder of PeoplePerHour, commented on these findings.

He said: “Just like the Bank Crisis before it, the pandemic has proven to be a powerful catalyst for people to reassess their work lives.

“Whether this is through freelancing full-time or supplementing their employment with a side-hustle, British workers are exploring the best way to take control of what they earn.”

Andy Chamberlain, a Director of Policy at the Association of Independent Professionals and the Self-Employed, also had the following to say on the results: “There has been a remarkable increase in the number of people working a freelance side-hustle.

“This seems to be a function of the additional time many employees have got out of the pandemic – whether because they have been furloughed, unable to work their normal jobs or simply because they are no longer losing time to the daily commute.

“For some, of course, this trend reflects the need for additional income because of the financial hit of the pandemic. For others, it seems likely this is a positive trend: that they have been able to use their extra time – and the flexibility of freelancing – to explore hobbies and passions and turn them into added income.

“The key is for the government to ensure there remains a welcome and supportive business environment for these new freelancers once the country opens up again: to support this new enterprise whether people are fully self-employed, or part-time freelancing alongside other work.”

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