Refusal of SEISS application
11. Before we decide if we should conduct a detailed investigation of 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 have not found any indications something has gone wrong.
12. Mrs P complains HMRC refused her application for SEISS. The Treasury Directions governing SEISS extended the deadline for submitting the 2018-19 tax return from 31 January 2020 to 23 April 2020. Mrs P did not submit any information for the 2018-19 tax year until 24 April 2020, the day after the extended deadline. That return was not accepted as Mrs P had not included the declaration page and HMRC asked her to submit her full tax return. An accountant did so, on her behalf, in May 2020.
13. Mrs P says she did not submit her 2018-19 tax return sooner because her health was poor during that period. We recognise Mrs P’s health problems may have made it more difficult for her but, unfortunately, the deadline of 23 April 2020 was a statutory one and HMRC had no discretion to extend it. Mrs P has confirmed she did not submit her tax return until after that date, and so HMRC’s decision to refuse her application was the only one they could make. Having spoken with Mrs P, I understand the refusal of her SEISS claim caused financial difficulties and worry and distress in addition to that caused by the pandemic. Having considered the evidence Mrs P has provided, it appears HMRC made their decision to refuse her application in line with the legislation and therefore got it right. I have seen no indications of maladministration (fault).
14. Mrs P asked HMRC to reconsider their decision on the basis of exceptional circumstances which had prevented her from submitting her tax return on time. Mrs P says her longstanding health conditions of depression and chronic fatigue were increasingly poor from the end of January 2020 for several months.
15. HMRC’s guidance on exceptional circumstances says they can exercise discretion if all of the following criteria are met:
i. the taxpayer has made attempts to be compliant
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
iii. the consequences of not paying the grant would be unconscionably harsh.
16. Mrs P says, prior to 2018-19, she had been fully compliant in submitting previous tax returns on time. From speaking with Mrs P, I have no reason to doubt her account that her health problems, at times, make it difficult for her to complete tasks. HMRC invited Mrs P to submit evidence of her ill health. She did in the form of a letter from her GP, dated 15 September 2020, which read: ‘I can confirm that Mrs P has a history of chronic fatigue and depression. She presently is looking after her elderly mother who has dementia, and this is causing her additional stress.’ HMRC considered the information Mrs P provided but did not consider it satisfied the exceptional criteria. It said it must be clear a customer’s circumstances directly prevented them from meeting the cut-off date, and that they made attempts to comply. HMRC felt the letter from Mrs P’s GP did not indicate Mrs P could not submit her tax return on time.
17. Mrs P’s tax return should, ordinarily, have been submitted by 31 January 2020, and so she had already missed that deadline when the SEISS scheme was announced. SEISS extended the deadline to 23 April 2020, but Mrs P still did not submit her tax return within that period. For exceptional circumstances, Mrs P would need to demonstrate that her health directly prevented her from submitting her 2018-19 tax return at any point up to, and including, 23 April. The letter from her GP sets out, very briefly, her history of poor health, but does not indicate it prevented her from meeting her tax obligations during the relevant period.
18. When Mrs P eventually submitted her 2018-19 return in May 2020, she did so via an accountant, who completed the return and filed it electronically on her behalf. It was open to Mrs P to engage the help of an accountant sooner if her health prevented her from submitting her return herself. HMRC have explained, with reference to their guidance, why the information Mrs P provided does not satisfy the exceptional circumstances criteria and I have seen no indications of failing in their decision-making process. We have seen no indication HMRC did not get it right.
Incorrect information about appeal
19. Before we decide if we should conduct a detailed investigation of a complaint, we also look at whether there are signs the events complained about had a negative effect which the organisation has not put right. Having done so, we have found HMRC has already done enough to put right the impact of these events.
20. Mrs P complains HMRC told her she could appeal against their decision to refuse her SEISS claim, when no appeal process exists. When I spoke with Mrs P, she said it had built her hopes up that she might receive the payment.
21. The SEISS legislation provides no formal right of appeal, but HMRC have discretion to review eligibility where exceptional circumstances have prevented someone from meeting their tax obligations. When Mrs P first applied for SEISS, HMRC said she was not eligible as they had not received her 2018-19 tax return. HMRC said she could request a review, on the grounds of ill health, once they had received her tax return. HMRC did subsequently review Mrs P’s application but decided the exceptional circumstances criteria had not been met.
22. Mrs P’s complaint appears to arise from miscommunication between her and HMRC. She was invited by HMRC to request a review of her eligibility but was also told by them that no formal appeal process exists. Both of those positions are correct. The SEISS legislation makes no provision for a formal appeal, but HMRC have operated a review process to pick up any errors and to consider exceptional circumstances.
23. The Parliamentary and Health Service Ombudsman’s Principle of being ‘being customer focused’ says public bodies should ‘communicate effectively, using clear language people can understand.’ HMRC’s responses, while not technically incorrect, appear to have caused confusion by saying there is no appeal process while also inviting Mrs P to request a review of their decision. Those letters were not as clear as they could have been about the distinction between the two and that appears to be an indication of maladministration.
24. We recognise HMRC’s correspondence may have caused Mrs P confusion at what was already a very stressful time. HMRC recognised their correspondence may have been unclear. In a letter dated June 2020 HMRC apologised to Mrs P for any confusion caused. HMRC’s apology for any confusion caused appears to be an appropriate and proportionate remedy.