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Thousands overpaid through government self-employment grant

Paloma Kubiak
Written By:
Paloma Kubiak

Thousands of people in receipt of the government’s Self-employment Income Support Scheme (SEISS) have been overpaid due to a miscalculation, HMRC confirmed.

HMRC is writing to SEISS grant recipients to let them know they have been overpaid. Crucially however, it is not asking for the overpaid amount to be paid back.

Instead, anyone applying for the second grant this month will receive an amount based on the correct calculation so they may see a smaller amount than expected.

HMRC said the miscalculation only affects a small number of claims – 0.6%. But as 2.7m self-employed workers have claimed under the scheme, with the total value of claims standing at £7.8bn, the overpayment impacts around 16,000 applicants. It added that the overpayment amounts to £12m or 0.15% of all claim values.

SEISS gave eligible applicants a taxable first grant worth 80% of average monthly profits based on the last three years of tax returns, up to a maximum of £2,500 a month, so £7,500 in total.

The first grant could be claimed up until Monday 13 July and a second and final grant worth a lesser 70% of people’s average monthly trading profits, capped at £2,190 per month so £6,570 in total will be available from Monday 17 August.

An HMRC spokesperson, said: “The Self-employment Income Support Scheme has been delivered at unprecedented pace and has protected the livelihoods of 2.7 million self-employed people in the UK.

“We have robust processes in place to prevent grants being paid incorrectly but a small number of people were paid grants in error and some received an incorrect amount. The majority of grants were paid correctly but in a very small number of cases not all the information held on a tax return was taken into account when calculating eligibility and grants.

“Our top priority has been ensuring self-employed people receive grants quickly while protecting public money from deliberate fraudsters. On this occasion we will not reclaim these payments to avoid unnecessary hardship for taxpayers who may have already used the money.”