Freelancers not waiting on SEISS revival at Autumn Budget 2021

A tacit acceptance that SEISS will not be revived at Autumn Budget 2021 is coinciding with freelancers accusing the scheme of being inadequate, just as HMRC gears up to police it.

Closed since Sep 30th, the Self-Employment Income Support Scheme is still showing up on Twitter, albeit not for reasons which the chancellor will want ahead of his Oct 27th statement.

One user wrote: “Many [of my fellow workers] left this business as we are self-employed and many didn’t qualify for the SEISS. And [even] if [we] did, it wasn’t enough to keep going.”

'SEISS revival omitted '

The government would counter that the five SEISS grants have effectively handed eligible freelancers almost £37,000, and Rishi Sunak is likely to point out the figure on the 27th.

But obtained yesterday by FreelanceUK, the Autumn Budget ‘wish-list’ of the UK’s largest business support group, the Federation of Small Businesses, does not even mention SEISS.

So either because it too believes the scheme is inadequate, or believes the government that there will be no sixth grant (originally ministers vowed only two grants), the FSB appears to accept that SEISS has had its day.

'Clawback'

In the eyes of HMRC however, compliance work on the scheme is only just getting started, warns the Association of Independent Professionals and the Self-Employed.

In an alert entitled "clawback advice," the association said the process of HMRC probing sole traders who received or wrongly claimed excess grant-amounts could result in “thousands” of tax investigations.

IPSE said: “The question of whether the self-employed should be wary of investigations into their use of [coronavirus-related] financial support rests largely on HMRC’s approach to honest but erroneous claims.

“Guidance on claiming government support payments was often complex, leaving open the possibility that some of the self-employed claimed money with a genuine belief they were entitled to it, without realising HMRC might hold a different view.”

'Reduced activity, capacity or demand'

For now, HMRC is simply encouraging SEISS grant-recipients to go forward to its officials if, on the fifth grant for example, their business was not impacted by reduced 'activity, capacity or demand,' or an inability to trade in the relevant periods.

Freelancers are also encouraged by the Revenue to contact it (rather than wait for it to contact them) if , when they made their claim, they did not intend to continue to trade or if they have incorporated their business.

And because SEISS phase five included a new turnover test, amendments to tax returns made on or after March 3rd, in a way which meant self-assessors would no longer eligible or entitled to a lower fourth or fifth grant than was paid, should likewise be flagged up, officials say.

'Comprehensive package'

Another potential issue which could result in an unforgiving HMRC if not volunteered concerns sole traders who made mistakes reporting their turnover in their claim for the fifth grant, with the effect they are actually entitled to a lower grant than they received.

"The fifth grant included a turnover test to determine the level of support. [But] we put in place a comprehensive package of support for customers to help them claim the fifth grant, including webinars, YouTube videos, our virtual assistant within the claims service, and detailed guidance and support on GOV.UK,” an HMRC spokesperson said, adding:

“And whilst support through the SEISS has ended, several elements of the government’s wider support package will continue to be available.”

'Extreme difficulties for self-employed'

And it’s support which IPSE policy director Andy Chamberlian implies sole traders absolutely need, as just last week, he spoke of “extreme difficulties being faced by the self-employed.”

“From the patchy support during the pandemic, to the tax hikes to the devastation caused by IR35, there is little doubt it has never been harder to work for yourself,” Mr Chamberlain added in a post. “We believe the government should be concerned about that and we will keep pushing that message until someone in government starts listening.”

 

12th October 2021

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