HM Revenue and Customs

4. Mr F is a self-employed Construction Industry Scheme (CIS) worker. He says he applied for HMRC’s SEISS during the COVID-19 pandemic.

5. He complains HMRC declined access to SEISS as it found he put self-employment income figures into the Pay As You Earn (PAYE) section of his 2018 to 2019 Self-Assessment Tax Return (SATR) in error.

6. Mr F says this is unfair as he has been self-employed for the last 20 years and had tax rebates from HMRC throughout the years in question. He said HMRC’s online tax portal accepted his 2018 to 2019 SATR but he was later told there was an error on it.

7. He says he has been put at a financial disadvantage by HMRC’s decision. He says he had no money to pay bills and this had a negative impact on his mental health and contributed to the breakup of his family.

8. Mr F wants HMRC to acknowledge its mistakes, apologise for them and look again at its SEISS decision.

9. Mr F first submitted his 2018 to 2019 SATR on 7 April 2019. He amended it on 10 April and this is when the income was put in the wrong section.

10. In April 2020, HMRC declined Mr F’s SEISS application because of the error.

11. Mr F requested a review of the decision and in June HMRC confirmed he was not eligible because he had listed his income as PAYE.

12. Mr F corrected his SATR on 17 July to show his income was from self employment.

15. Mr F says the COVID-19 pandemic meant he was unable to find work, which affected his finances.

16. Mr F says if HMRC was unsure of his self employed status, it would not have paid him tax rebates.

17. We appreciate the hardship Mr F describes and understand having access to a financial support scheme like SEISS is important to him.

18. HMRC told Mr F it could not give access to SEISS despite the amendment he made to his SATR in July 2020, because it was submitted after the 26 March 2020 deadline.

19. This relates to an update to the Coronavirus Act and says: ‘For the purposes of SEISS, amounts of trading profits and relevant income are determined by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.’

20. This legislation covers SEISS and means someone must have submitted their tax return by 23 April 2020 to be able to apply for the SEISS scheme. Amendments to already submitted tax returns (as in Mr F’s case) would not be taken into consideration after 6pm on 26 March 2020.

21. HMRC tells us this deadline is an important anti-fraud measure to make sure it was able to tell genuine SATR amendments from those attempting to submit fake amendments to exploit SEISS.

22. We think HMRC’s explanation seems reasonable and it is important for it to carefully follow the rules to safeguard against potential fraud.

23. HMRC acted in line with guidance when it declined to review Mr F’s amended SATRs submitted in July 2020.

24. We will now look at whether HMRC’s consideration of Mr F’s SATR, submitted in April 2019, is in line with guidance.

25. On 30 April 2020, the Chancellor issued the Directions for SEISS. It said the person’s self-employed profits for the relevant tax year (2018 to 2019) must be equal to or more than the applicant’s employed income.

26. HMRC says Mr F’s SATR showed his employed income was greater than his self-employed profits, and for this reason he was not eligible for SEISS. We can see no signs of failings in HMRC’s consideration of Mr F’s SEISS application. It correctly considered the SATR to check his eligibility to SEISS, which is in line with the Directions.

27. While HMRC seems to have appropriately considered Mr F’s SEISS application, we understand he says HMRC’s online portal accepted his SATR but he was unfairly later told there was an error on it.

28. Mr F says when he first submitted his SATR through HMRC’s online portal he did not realise he had made a mistake. He says he only realised when HMRC considered his SEISS application in 2020 and told him he had wrongly completed the PAYE section. Mr F says HMRC should have spotted this error sooner.

29. HMRC’s SEISS decision was based on Mr F’s SATR, submitted in April 2019. This SATR included PAYE income. This is not an ‘obvious error’ that HMRC should pick up on.

30. HMRC’s internal Self-Assessment manual says: ‘During the routine processing HMRC check the tax return to correct any obvious errors or omissions that come to light at that stage. Some telephone calls may be made to resolve any minor queries in order to ensure that the return is accurately processed at the first attempt. For many customers the tax return, including the self-assessment, is simply processed as submitted.’

31. Having considered HMRC’s responsibility to correct mistakes on SATRs, we note its SAM121530 guidance says: ‘Beginning with the day on which the customer’s return is received up to 9 months, you may repair any mistakes or obvious errors.

Obvious errors include those shown up on the computer whilst entering return details. Examples include arithmetical errors, the wrong carry forward figure from one box to another or missing information we hold on our systems such as Pay, Tax, Benefits and accounting information.’

32. There were no ‘obvious errors’ in Mr F’s SATR that could reasonably have led HMRC to make further enquiries at the initial processing stage. This is because Mr F added PAYE income and this could have been because of a change in circumstances instead of a mistake.

33. What Mr F put on his SATR was accepted in line with the guidance and HMRC would not have been aware of the problem until Mr F made his SEISS application in early 2020. It then had a more detailed look at what had been declared.

34. HMRC seems to have acted in line with our Principles which say: ‘All public bodies must comply with the law and have regard for the rights of those concerned. They should act according to their statutory powers and duties and any other rules governing the service they provide. They should follow their own policy and procedural guidance, whether published or internal.’

35. We must also remember there is a joint responsibility and the customer has a duty to make sure the information on their SATR is accurate. This is covered in Section 8(2) of the Taxes Management Act 1970, which says: ‘Every return under this section shall include a declaration by the person making the return to the effect than the return is to the best of his knowledge correct and complete.’

36. We looked at Mr F’s argument that HMRC would not have paid him rebates if it did not know he was self-employed. The first rebate was paid on 18 April 2019 in response to Mr F amending his SATR on 10 April 2019. The second rebate was paid on 21 July 2020 in response to Mr F’s further amendment on 15 July 2020, to show his income in the self-employed section.

37. HMRC’s tax rebates were to make sure Mr F was refunded for any overpaid tax, based on information from the SATR. The evidence we have seen does not suggest HMRC made a mistake in how it considered Mr F’s SATRs or in how it processed his SEISS application.

38. For these reasons we have decided to take no further action on Mr F’s complaint.

39. We recognise how important this complaint is to him and how this is not the outcome he hoped for. We hope he is assured we have taken his complaint seriously and have carefully considered it.

1. We are sorry to hear of Mr F’s concerns about the service he received from HM Revenue and Customs (HMRC). We understand the Self-Employment Income Support Scheme (SEISS) application process was distressing for him and came at a difficult time during the COVID-19 pandemic, when employment in the construction industry was severely affected. We hope our statement gives Mr F some reassurance around HMRC’s handling of his SEISS application.

2. Having carefully considered Mr F’s complaint, we have decided to take no further action. We think HMRC considered Mr F’s SEISS application in line with applicable guidelines and standards.

3. This statement gives more detail on how we reached our decision.