The Adjudicator's Office

4. HMRC refused Mr and Mrs U’s applications for SEISS payments on the grounds they had amended their tax returns after the deadline of 26 March 2020. Mr and Mrs U said they were unable to amend their tax returns in time, as Mr U’s mother had been diagnosed with a terminal illness and they were supporting their son through treatment for addiction. Mr and Mrs U complained HMRC did not consider those exceptional circumstances during their appeal against its decision to refuse SEISS. They further complained the Adjudicator also failed to consider their exceptional circumstances. They said the Adjudicator’s response noted the circumstances but provided no consideration of them.

5. Mr and Mrs U said they have experienced stress and frustration because HMRC and the Adjudicator failed to consider their exceptional circumstances. They further complained they suffered severe financial hardship during the pandemic as a result of not receiving SEISS. This in turn had a detrimental effect on their mental health.

6. Mr and Mrs U wanted HMRC to properly consider their exceptional circumstances and award them the SEISS grant they believe they are entitled to. They are also seeking an apology and compensation for the stress and frustration they have experienced.

7. On 31 January 2020, Mr and Mrs U submitted their tax returns to HMRC. They each declared an income of £0 but noted on the return they would update it with the correct figure later.

8. In April 2020 Mr and Mrs U made claims for SEISS payments as they were unable to work, due to restrictions introduced during the Coronavirus pandemic. In May 2020 HMRC wrote to Mr and Mrs U to say they were not eligible for SEISS because they had not been trading in 2018-19 and had declared no income for that period.

9. Mr and Mrs U complained to HMRC. They said they had been trading continuously since 1996 until the pandemic started. They said they initially declared a nil income for 2018-19 as the relevant information was not available at that time, and they needed to submit their tax returns by 31 January to avoid a late filing penalty. HMRC did not uphold the complaint. They said Mr and Mrs U had updated their tax returns with the correct income figures for the year, but those changes had been made after the SEISS deadline of 26 March 2020.

10. Mr and Mrs U then complained to the Adjudicator. They said the delay in providing the correct income figures had been due to both the information not being available, but also because they were dealing with difficult family situations during that period. They said they had been caring for Mr U’s terminally ill mother and had also been supporting their son through treatment for addiction. The Adjudicator did not uphold their complaints. The Adjudicator said Mr and Mrs U were not eligible for SEISS as they did not meet the eligibility criteria.

11. On 26 March 2020, the Government announced the Self-Employed Income Support Scheme (SEISS) to help self-employed people who found themselves adversely affected by COVID-19. The scheme was open to those with trading profits up to £50,000 per year and would pay eligible people a single taxable grant of 80% of their average monthly profits in the years 2016-17, 2017-18 and 2018-19. This was capped at £7,500. The scheme was only open to self-employed people who were still trading at the outset of the pandemic.

12. The legislation for the scheme also extended the deadline for submitting the 2018-19 tax return from 31 January 2020 to 23 April 2020, to ensure that as many self-employed people as possible would be eligible. The deadline for amendments to tax returns already filed was 6pm on 26 March 2020. The scheme opened for claims for the first grant on 13 May 2020.

13. HMRC have some limited discretion to award SEISS when the deadline was not met. Its guidance says it can exercise discretion if all of the following criteria are met:

i. the taxpayer has made attempts to be compliant; and ii. they have been unable to comply with the requirement to file a tax return by the relevant date it is because of a particular vulnerability; and iii. the consequences of not paying the grant would be unconscionably harsh.

HMRC’s rejection of SEISS claim

16. Mr and Mrs U complained HMRC refused their application for SEISS and failed to consider the exceptional circumstances which prevented them from complying with the SEISS criteria. Mr and Mrs U submitted their tax returns for 2018-19 on 31 January 2020. At that time, they say their income details were not available, and so they declared a £0 income but annotated the returns to say they would update them with the correct income later. They later provided the correct income details in April 2020.

17. Mr and Mrs U submitted claims for SEISS payments in May 2020. The SEISS legislation says SEISS payments were only available to those who were still trading immediately prior to the pandemic. The legislation extended the deadline for filing tax returns for 2018-19 and allowed for amendments made to the tax returns prior to 26 March 2020 to be accepted. HMRC refused Mr and Mrs U’s applications because they had declared a £0 income on their 2018-19 tax returns, which indicated they had not been trading during that period. While Mr and Mrs U had annotated their returns to say they would provide income details later, they did not until after the deadline of 26 March 2020, and so HMRC could not accept that information for SEISS purposes.

18. The Ombudsman’s Principle ‘getting it right’ says public bodies must comply with the law. 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. When they submitted their tax returns, Mr and Mrs U did not declare an income. While they later amended that information in April 2020, the legislation says HMRC could not accept amendments made after 26 March 2020. We find that in refusing Mr and Mrs U’s application, HMRC followed the relevant law and we have seen no evidence HMRC did not get it right. We do not uphold this aspect of the complaint.

HMRC’s consideration of exceptional circumstances

19. When Mr and Mrs U complained to HMRC about their SEISS claim being refused, they said they had been unable to provide their income details sooner, and within the deadline, because they had been experiencing exceptional family difficulties. HMRC’s guidance provides very limited discretion to accept SEISS applications where the deadline for submitting tax information has not been met.

20. In its response, HMRC said that Mr U first told them of the exceptional circumstances in October 2020 when they were considering his complaint at stage two of their complaints process. HMRC said it considered the information Mr U provided but could not accept his claim because the guidance on exceptional circumstances had not been met. The guidance requires all three aspects to be satisfied. HMRC say Mr U’s claim did not satisfy the first criteria. He was not compliant with his tax responsibilities because he had not provided HMRC with full and accurate information about his earnings, and owed tax from previous years. HMRC have provided evidence that in 2017-18 (one of the years used to calculate entitlement for SEISS) Mr U declared no income. He noted on the tax return for that year that he had earnings in that period and would provide that information later, but HMRC say he did not and there are still no income details for 2017-18. HMRC said, while they empathised with Mr U, he had not complied with tax legislation and so did not meet the requirements for SEISS.

21. As explained above, the Ombudsman’s Principle ‘getting it right’ says public bodies must comply with any relevant law and guidance. Based on the evidence we have seen, we find HMRC did consider whether Mr U met its criteria for exceptional circumstances. While it is clear Mr U was experiencing some very difficult family issues in early 2020, and we do not underestimate the impact this would have had, he had not complied fully with tax legislation prior to that period. On that basis, we find HMRC did get it right. We do not uphold this aspect of the complaint.

22. Similarly, HMRC say Mrs U first mentioned their family circumstances during stage two of their complaints process. HMRC say they considered those circumstances, in line with the guidance, but she had not been fully compliant as she had not provided full and accurate information about her income, and had not paid her full tax liability. HMRC provided evidence that Mrs U had not fully complied with her tax obligations, as she owes tax from earlier periods. Mrs U does not dispute this, and she had not provided full income details on time for 2017-18. As Mrs U was not fully compliant, she did not satisfy the exceptional circumstances criteria.

23. As with Mr U’s claim, we find HMRC did consider Mrs U’s exceptional circumstances in line with its guidance. While we acknowledge the difficult circumstances Mrs U was contending with in early 2020, as she had not fully complied with her tax responsibilities in earlier years, we find HMRC did get it right when considering her exceptional circumstances. We do not uphold this aspect of the complaint.

24. Mr and Mrs U provided further details about the difficult circumstances they experienced, dating back to 2015. Mr and Mrs U say this had an impact on their ability to comply with their tax obligations. Mr and Mrs U’s tax affairs in earlier years, and HMRC’s view they were non-compliant, were not part of the complaint brought to us. As we had not agreed to investigate their non-compliance at the start of this complaint, we were unable to consider this now. If Mr and Mrs U believe their exceptional circumstances were the cause of their non-compliance, it is open to them to raise that issue with HMRC.

The Adjudicator’s failure to consider exceptional circumstances

25. Mr and Mrs U complain the Adjudicator did not consider their exceptional circumstances when it investigated their complaints.

26. The Adjudicator issued their reports on Mr and Mrs U’s complaints on 4 January 2021. In these, they set out Mr and Mrs U’s family circumstances in early 2020 and acknowledged the impact these caused. The Adjudicator provided summaries of Mr and Mrs U’s tax returns since 2017. The Adjudicator said Mr and Mrs U had not provided income figures for 2017-18, and had only provided income figures for 2018-19, after the SEISS deadline had passed. The Adjudicator said there was no evidence Mr and Mrs U’s circumstances had prevented them from providing the information on time. The Adjudicator said HMRC had applied the guidance correctly and it did not uphold Mr and Mrs U’s complaints.

27. The Ombudsman’s Principle ‘getting it right’ says when making decision, public bodies should have regard to relevant legislation and guidance and take account of all relevant considerations. From the evidence provided to us by the Adjudicator’s Office, the Adjudicator was fully aware of Mr and Mrs U’s circumstances and considered whether they were responsible for preventing them from satisfying the terms of SEISS. The Adjudicator noted Mr and Mrs U had not fully complied with their tax obligations for a period before the start of their family difficulties and, as such, they did not meet the exceptional circumstances criteria. We find in reaching their decision, the Adjudicator took account of all relevant considerations and followed the relevant legislation and guidance.

28. Based on the evidence, we are satisfied that the Adjudicator did consider Mr and Mrs U’s exceptional circumstances. We do not uphold this aspect of Mr and Mrs U’s complaint.

1. We have found HM Revenue & Customs’ (HMRC’s) decision to refuse Mr and Mrs U’s claims under the Self-employed Income Support Scheme (SEISS) were in line with the relevant legislation.

2. We also found no evidence HMRC, or the Adjudicator’s Office (the Adjudicator), failed to consider Mr and Mrs U’s exceptional circumstances, in line with the relevant guidance.

3. We recognise this is not the decision Mr and Mrs U were hoping for. From the evidence we have seen, it is clear that Mr and Mrs U were experiencing significant family difficulties in early 2020, and for some time prior to that. We recognise the emotional impact of those difficulties on Mr and Mrs U. We know the loss of SEISS payments also caused additional worry at a time when Mr and Mrs U were already experiencing the financial impact of the pandemic.