HM Revenue & Customs

4. Mrs B complained that HMRC wrongly refused her applications for the SEISS grant several times, even though she is self-employed. She told us she had missed out on income due to the coronavirus pandemic. Mrs B said she wanted to receive the SEISS grant, she believes she is entitled to, covering the period from the beginning of lockdown in March 2020.

5. Mrs B is self-employed as a beauty therapist. She also, with her business partner, runs a business which provides a range of beauty and spa therapies. Part of Mrs B’s income comes from clinicians who use the space temporarily for individual sessions. This income was entered on her self-assessment tax returns as rental income.

6. On 26 March 2020, the SEISS was announced to provide grants to self-employed people who had lost profits as a result of the coronavirus pandemic. Any amendments customers made to their tax returns after 6pm on this date were not taken into account when calculating if a SEISS grant was due. This was intended to prevent possible fraud.

7. Mrs B applied for a SEISS grant, and HMRC made a decision that she was not eligible for the scheme because her non-trading income for the tax years 2016-17, 2017-18 and 2018-19 was more than the sum of her trading profits for those years. Mrs B asked for this decision to be reviewed and her MP also contacted HMRC.

8. In June 2020, Mrs B’s accountant amended her self-assessment tax return, however this was after the cut off date of 26 March 2020, so the changes were not taken into account when considering eligibility for the SEISS grant.

9. On 9 November 2020, the Adjudicator decided not to uphold Mrs B’s complaint, saying that HMRC had correctly followed guidance and legislation in relation to her application for a SEISS grant.

Issue 1 – HMRC’s refusal of Mrs B’s application for a SEISS grant

12. Before we decide if we should investigate a complaint, we look at whether there are signs the organisation has got something wrong. We do this by comparing what should have happened with what did happen. We have done this, and we have not found any indications that something has gone wrong.

13. Mrs B’s failure to qualify for the SEISS grant was because the information on her self-assessment tax returns showed her non-trading income during the relevant period was more than her trading income. This meant she did not meet the requirements under the Treasury Direction. In that, in addition to being less than £50,000, trading profits had to be at least equal to non-trading income.

14. Mrs B’s accountant told us that under HMRC guidance, Mrs B had been free to declare the income she received from clinicians as either rental income or trading income; she opted to enter it as rental income. She pointed out that Mrs B could not have known, at the time she completed her self-assessment tax return, that how she entered this income could have later repercussions for the SEISS grant.

15. While we appreciate the point from Mrs B and her accountant that they could have recorded the income differently, it remains the case that Mrs B did enter the income as rental income on her tax return. This meant it was counted as non-trading income when HMRC looked at her self-assessment tax returns, to make a decision on whether or not she was eligible for SEISS. Our Principles say that, in their decision-making, public bodies should have regard to the relevant legislation. In this case, when making its consideration HMRC had to follow the parameters set by the Treasury Direction, and there are no indications it did not do this.

16. When we spoke to HMRC it was empathetic to Mrs B’s position but said that it had to make its decision in line with the Treasury Direction and based on the information in self-assessment tax returns on 26 March 2020.

17. Based on the above, we have not seen any indication HMRC got its consideration wrong or failed to follow the relevant legislation and guidance when reaching its decision concerning Mrs B’s eligibility for the SEISS grant.

1. We have carefully considered Mrs B’s complaint about HM Revenue and Customs (HMRC). We have seen no indication that anything went seriously wrong.

2. We understand Mrs B was seriously affected by the income she lost out on because of the coronavirus pandemic. It is also very understandable that she feels she should have received a grant from the Self-Employed Income Support Scheme (SEISS), which was intended to provide financial support to self-employed people, like her, whose trade was adversely affected by the pandemic.

3. HMRC had to decide eligibility for SEISS grants in line with the rules set out in the 30 April 2020 direction from the Treasury. Mrs B was not eligible under these rules because the total non-trading income she declared was more than the trading income she declared in the relevant period. We will explain this in more detail below. We appreciate how disappointing this will be for Mrs B particularly given the extent to which missing out on the SEISS grant has affected her.