Standards and guidance
19. The Treasury Direction noted above is the legislation explaining the payment of SEISS grants. It says to qualify for a SEISS grant a customer must: • be a self-employed person whose business has been negatively affected by COVID-19 • have been self-employed in the tax years 2018/19 and 2019/20 • meet the profits condition • have delivered a SATR for a relevant tax year on or before 23 April 2020. The relevant year is determined by the years in which the person meets the profits condition.
20. HMRC has limited options (discretion) in its assessment of SEISS applications. The Commissioners Decisions Standing Committee say it must consider discretion when: • an HMRC error or ‘process put in place for HMRC’s administrative convenience’ has resulted in the customer not qualifying for SEISS • the customer is worse off as a result of applying after relying on the online eligibility tool • the customer was eligible but lived somewhere so remote that they could not be expected to be aware about the scheme or the deadlines or were unable to comply with the deadlines.
21. Alternatively the customer: • must have made attempts to comply with the law • could not submit their tax return by the required date because they were vulnerable • would suffer harsh consequences if the SEISS grant was not paid. Examples included a threat to life but not financial hardship.
22. Customers complete their self-assessment details on form SA100. The SA100 for 2018/19 says if the customer puts an ‘X’ in any of the ‘YES’ boxes on page TR2, they will also need to complete a supplementary page for that income. Page TR2 includes self employment income. The SA100 asks the customer to check if the relevant supplementary page is included and if not explains where the customer can print off any forms they need.
23. It also says if the customer indicates on page TR2 they have a specific income but do not enclose the relevant supplementary form, then HMRC will treat the tax return as incomplete and send it back to them.
24. The SA103S is a short self-employment form which customers can complete when their self-employment income does not go above the annual limit for VAT. The form is easier to complete than the full-length version, SA103F.
25. The HMRC Capture Operators Guide explains when HMRC staff process a paper return it should take clerical action or contact the customer. We have looked at this guidance in more detail below.
26. Ms I said Mr R was only just getting back on his feet after having personal problems.
She says after his bankruptcy in January 2018, he got help from an HMRC adviser at the council office to fill in his tax returns.
27. Ms I says she thinks she put Mr R’s earnings on his 2018/19 SATR as pay as you earn (PAYE) income instead of self-employed income. HMRC provided us with screenshots of both the SATR submitted in October 2019 and the amended form. On the first SATR Ms I has entered Mr R’s self-employed income in the ‘other UK income not included on supplementary pages’.
28. HMRC say she did not complete the self-employment supplementary page and there was no information about any other self-employment income or declaration of any profits. On the amended form, Mr R’s income was completed on the self-employment supplementary page and included details of his profits.
Shortened form
29. Ms I tells us when Mr R got help with his previous SATRs, the adviser gave him the shortened form because it would be easier for him. She said HMRC also sent him the shortened form to complete for 2018/19. She thinks this again was because it was easier for him. HMRC confirm Mr R’s earlier returns were full returns but completed with the SA103S. It does not know if the SA103S was issued with the main tax return form but directs us to the information on the SA100 which says where the customer can get supplementary pages if needed.
Extra Support Team (EST)
30. Ms I says she did not think EST was available in October 2019 and so she completed Mr R’s 2018/19 paper SATR for him. She says she tried to get an accountant but they were all booked up because of the lockdown.
31. We asked HMRC why it did not give extra support to Mr R for the completion of his 2018/19 SATR. It tells us the bankruptcy team agreed to help at the time of his bankruptcy in January 2018, in response to a letter Ms I sent explaining Mr R’s difficulties. It says at this time she was put in charge of his tax affairs.
32. HMRC says EST face-to-face service was available at the time Ms I completed Mr R’s SATR in October 2019. It says she could have accessed this service by calling HMRC and asking to be referred. HMRC have confirmed the same information was available online.
33. HMRC says there is no record of Ms I requesting help to submit the 2018/19 SATR. It has provided details of Ms I’s and Mr R’s contact with HMRC between the date it issued the SATR on 16 May 2019 to 8 July 2020 when Mr R submitted the amended SATR. HMRC records show: • on 16 May HMRC spoke to Ms I to arrange a face-to-face appointment with EST to help with Mr R’s previous SATRs in relation to his bankruptcy • on 3 June HMRC confirmed Mr R’s EST appointment on 4 June • on 2 July HMRC spoke to Mr R and explained why he was not eligible for SEISS • on 7 July HMRC provided further advice to Mr R about amending his 18/19 SATR.
Obvious mistake 34. Ms I entered Mr R’s self-employment income in box 17 on TR3. This box is for ‘other UK income not included on supplementary pages’. The SA150 guidance provides a list of income which should be entered here including ‘miscellaneous income from casual earnings, commission or freelance income’.
35. Ms I thinks HMRC should have recognised her mistake on the SATR. She says this is because it was obvious Mr R did not have any other income apart from his self-employed income, because he had been made bankrupt in January 2018.
36. HMRC Capture Operators Guide has guidance for staff processing information on TR3 box 17. It says: • you should capture as seen unless other relevant information is shown on or enclosed with the return • use any other information to complete the appropriate boxes and provide a customer service message • when information is given that the source of income is either self-employment or capital gains you should create the relevant supplementary pages and enter the appropriate information • when it is clear the information entered here has been shown in the wrong box, you should capture as seen and consider adding a customer service message to advise which boxes or supplementary pages should be used in the future. Be careful to make sure that the information has been entered in the wrong box.
37. Box 20 refers to ‘benefit from pre-own assets’. The guidance for box 20 says where the customer has entered income in this box, there must be supporting evidence describing the income in either box 21 or box 19 or the attached schedule. If the description of the income has not been supplied, send a customer service message, ‘nothing in box 20’.
38. Finally, box 21 should describe the income in boxes 17 and/or 20. The guidance says where an entry is made in boxes 17 and/or 20 without a corresponding description in box 21, a service message should be sent to the customer.
39. HMRC tells us it would only move any information entered on the SATR to a supplementary page when it is clearly stated it is related to a specific income such as self employed income. If this is not the case, it will capture the information as seen.
Review of submitted SATR
40. Ms I says if she had submitted Mr R’s SATR online she would have been able to access the contents of the form and make amendments. She says Mr R was put at a disadvantage because he used a paper form and it was not possible to check what had been sent and make any necessary changes.
41. HMRC confirms a customer who has submitted their SATR online can review the information they have submitted. It also says there is no way of checking the contents of a paper SATR once sent, unless the customer keeps a copy. Customers can request a copy or a screenshot from HMRC.
Discretion policy
42. Ms I understands why Mr R did not meet the legal requirement for SEISS but is asking HMRC to reconsider their decision not to award him the grant. She says this is because the incorrect information on the SATR was a genuine mistake and has caused distress and financial hardship to the family.
43. HMRC says it did not review the case as a discretionary claim because Mr R did not meet the criteria to consider a late claim. It says he reported self-employed income incorrectly and the SATR was correctly captured as seen.
Our conclusions
44. HMRC are obliged to apply the law when it makes its decisions. In this case Mr R did not meet the legal requirements to qualify for a SEISS grant and its decision met the relevant law. Because of this, there is no sign of fault in HMRC’s decision not to find Mr R eligible for SEISS.
Discretion policy
45. HMRC has some discretion to pay a SEISS grant where the customer does not meet the legal requirements for eligibility. A mistake on the part of the customer does not meet its policy for discretion.
46. We have considered whether there are any other factors in this case which would meet the discretion policy.
HMRC error
47. We have looked at whether HMRC should have recognised the error on the SATR. We agree from HMRC Capture Operators Guide that the clerical staff captured Mr R’s SATR as seen in line with its guidance. This is because Ms I did not give any additional information with the SATR which would tell HMRC to send any supplementary pages or a customer service message. Ms I did not tick box 2 on TR2 which would have shown HMRC Mr R had self-employment earnings which needed to be entered elsewhere.
48. We also see Ms I did not enter anything into box 20 and therefore HMRC were right in not taking any action. Finally, Ms I wrote a description of Mr R’s work in box 20. This description related to the possible types of income which could be included in this box. This meant HMRC staff did not know the information had been entered in the wrong box and it did not need to send a customer service message.
49. We have not seen anything to suggest HMRC made any mistakes.
Detrimental reliance
50. HMRC’s discretion policy can be used where the customer is worse off due to applying for SEISS, because an online eligibility tool has said they will be better off if they apply. Ms I has not provided us with any evidence which suggests this part of the policy applies here.
‘Unconscionably harsh consequences’
51. HMRC’s discretion policy allows discretion where the customer has made attempts to comply with the law, could not submit their tax return because they were vulnerable in some way and where they would suffer ‘unconscionably harsh consequences’ if the grant was not paid. We cannot apply these alternative criteria for discretion in this case. This is because while we see there was an attempt to be compliant, we cannot say Mr R was unable to comply with the requirements due to a disability. We understand he had difficulties completing forms, but in this case Ms I completed the form on his behalf. Ms I has not made us aware of any disabilities. We have discussed Mr R’s potential vulnerability above and explained that Ms I did not make HMRC aware that she or Mr R needed help to complete the SATR.
52. Ms I has described suffering distress and financial hardship as a result of HMRC’s decision. In line with the guidance, we cannot consider financial hardship and Ms I’s description of the upset and distress she experienced are not as significant as a threat to life which is the example given by HMRC.
53. We have also looked at the following issues that Ms I is concerned about.
Review of submitted SATR
54. We understand Ms I’s frustration at not being able to check the contents of the SATR after she sent it to HMRC. We also see it is easier for online customers to review the contents of a submitted form. Ms I had the option of taking a copy if she thought this would be necessary and we also see HMRC would have been able to provide her with a copy if she had asked.
55. More significantly we cannot say whether she would have changed the content of the SATR before the deadline for SEISS claims. It seems unlikely she would have done since she had no reason to think anything was wrong, up until the time HMRC refused Mr R’s SEISS application.
Extra Support Team (EST)
56. We have considered whether HMRC should have offered extra support to Mr R to help him complete his 2018/19 SATR, as he had been supported before.
57. It seems reasonable that extra support was not offered again. HMRC knew by this time Ms I was looking after Mr R’s tax affairs. We also consider she could have asked HMRC for help rather than assuming support was no longer available. HMRC had only arranged support a few months before it issued the 2018/19 form. We see she approached HMRC for help before and in the circumstances would expect her to do so again if she felt this was needed.
58. We note information about extra support was available online and we recognise Ms I may not have found it easy to access this since she had chosen a paper SATR not an online one. We do not consider this relevant since we know she was already aware of the EST service and had successfully managed to arrange it before.
Shortened form
59. Mrs R tells us she thinks she completed a shortened tax return in October 2019. This does not correspond with HMRC’s account of only receiving the SA100 without an SA150S supplementary form. It is difficult to say what happened here, but the evidence suggests she completed information on one form and this was an SA100.
60. We have considered whether HMRC should have provided a supplementary form for self-employed income with the SA100 and we cannot see any sign this should have happened. This is because the SA100 clearly explains to the customer they must enter their self-employed income on a supplementary form and how to get the necessary forms if they do not have them.
61. We understand Ms I has found this situation incredibly frustrating and upsetting and we see it caused the family financial hardship. We understand she made a genuine mistake when completing the form.
62. Unfortunately, although HMRC have some discretion in accepting out of time SEISS applications, the scope of this discretion has been made very limited to avoid fraudulent claims. We have not seen that Ms I met the criteria for HMRC to use its discretion. We hope our investigation of her complaint gives her a clearer explanation of HMRC’s decision and reassures her it has treated Mr R’s SEISS claim in line with the relevant discretion guidance.