Source · Select Committees · Public Accounts Committee
Recommendation 14
14
We were concerned that the extension to SEISS could leave more self-employed people without support...
Conclusion
We were concerned that the extension to SEISS could leave more self-employed people without support than the initial scheme. HMRC based eligibility for the initial SEISS on tax return data up to 2018–19 and estimated, as part of initial planning at the start of lockdown, that this meant around 0.2 million newly self-employed people were unable to claim the grant. HM Treasury told us that it considered alternative arrangements, but that basing the grant awards on previously submitted data helped prevent the risk of people manipulating their returns to receive higher payments. HMRC confirmed that the extension to SEISS would continue to operate on the basis of 2018–19 returns despite HMRC accepting that the 2019–20 tax year ended in April 2020 and returns were starting to come in ahead of the 31 January 2021 deadline. The NAO noted in its report that the number of self -employed people excluded from the initial SEISS could have been greater than 0.2 million if lockdown occurred further from the annual tax return deadline. The SEISS extension occurred nine months after the 2018–19 deadline rather than the two months for the initial scheme. HMRC told us that if it had more up-to-date data on those who were the self-employed it may have been able to operate the scheme differently. Self- employed tax reporting on a quarterly basis to HMRC is due to come in as part of its Making Tax Digital project, but other than the pilot scheme, is not due until 2023.35
Government Response
Not Addressed
HM Government
Not Addressed
3: PAC conclusion: The Departments have not done enough to reduce the number of people excluded from the schemes. 3: PAC recommendation: HM Treasury and HMRC should investigate whether more data within and outside of the tax system could be used to determine eligibility for currently excluded groups and write to the committee within six weeks to explain their findings. HM Treasury and HM Revenue and Customs should liaise with departments which have a detailed knowledge of the affected sectors in order to improve access to Covid-19 related support schemes for currently excluded groups. 3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 People may be ineligible for the Coronavirus Job Retention Scheme (CJRS) or the Self-Employment Income Support Scheme (SEISS) due to either policy choices or administrative constraints. On the latter, throughout the pandemic, the departments have had to balance the desire to provide support to as many people as possible, as quickly as possible, with the need to protect public funds from error and fraud. To strike this balance, both schemes were based around using information that HMRC already held and could therefore verify. 3.3 As the schemes have evolved, the two departments have been able to extend support to more people; for example, moving the payroll cut-off date for CJRS, and supporting new parents and reservists. Those unable to access support via CJRS or SEISS may be able to benefit from other measures, including funding given to local authorities. 3.4 The HMRC and HM Treasury 10-year Tax Administration Strategy sets out the departments’ commitments to develop a fully digital tax system that works closer to real time. This includes extending 27 MTD and increasing use of real-time information to give customers and HMRC a more up-to-date understanding of and certainty over a customer’s position. 3.5 The government continues to explore, and discuss with stakeholders, options for best supporting those affected by COVID 19.