12. 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 indication that HMRC did not follow the relevant guidance when it declined to pay the fourth and fifth SEISS grants.
13. Mr A says he took the necessary steps to submit his 2019-2020 tax return by the 31 January 2021. His accountant told him the only reason HMRC did not receive it on time was because an HMRC system error meant that they received confirmation the tax return was submitted, but HMRC did not log the tax return.
14. He adds that HMRC appears to have accepted fault as it waived the late filing penalty it sent him on 5 March 2021, but it insisted he did not file on time when it considered his SEISS grant applications.
15. HMRC said that it had no evidence the tax return was submitted until 5 March 2021. This was slightly after the 2 March filing deadline, for accessing the SEISS grants and therefore Mr A did not qualify for the grants.
16. Our Principles of good administration say that all public bodies must comply with the law and have regard for the rights of those concerned. 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. We considered whether HMRC appeared to have acted in line with the relevant policy and guidance.
17. HMRC guidance for the fourth and fifth SEISS grants explains that one of the conditions to receive either or both of these grants is that the applicant must have filed their 2019-2020 by 2 March 2021. This is due to concerns about the potential for fraudulent claims. HMRC also has internal guidance which sets out strictly limited circumstances in which it can use discretion to agree to a grant even if the applicant did not meet all of the conditions, including when HMRC is at fault.
18. Mr A believes that because HMRC waived his late filing penalty, it accepted he had filed his tax return by 31 January 2021. We have seen that HMRC considered the appeal against the late filing penalty which Mr A’s accountant submitted on his behalf in June 2021. Unlike the SEISS guidance, rules relating to late filing of tax returns give HMRC broad discretion to cancel such penalties, as penalties are intended to encourage taxpayers to comply with their obligations. Information available online at that time said that:‘You can appeal against some penalties if you have a reasonable excuse, for example for your return or payment being late… A reasonable excuse is something that stopped you meeting a tax obligation that you took reasonable care to meet’.
19. HMRC waived the late filing penalty in Mr A’s case, although this does not necessarily mean that it accepted he or his accountant had submitted the tax return on 31 January. It could also mean it accepted Mr A had made some effort to submit the tax return, even if he did not do so.
20. We have considered also, Mr A’s contention that he has evidence that he submitted his tax return before 31 January 2021. Mr A shared screenshots he provided HMRC with which showed exchanges with his accountant. These show activity in January 2021, including one of an ‘IR Mark’ reference number HMRC generated on 31 January in relation to his tax return.
21. An IR Mark is a 33 digit reference number which confirms that a tax return has been provisionally completed and is ready for submission to HMRC. This enables an accountant and taxpayer to agree the figures on the return, before it is fully submitted to HMRC. If the tax return is changed again before it is submitted, a new IR Mark is generated. This means protects a taxpayer from the tax return being amended without their knowledge. When the tax return is fully submitted the accountant or taxpayer receives a 32 digit ‘Correlation ID’. An IR Mark is not enough to say that a tax return has been submitted, a Correlation ID is needed for this. Mr A was likely unaware of the difference between an IR Mark and a Correlation ID at the time of these events.
22. There is no Correlation ID in the evidence which Mr A sent to HMRC. We note, however, there is a discrepancy in the evidence Mr A sent us. His screenshot of the IR Mark is only 32 digits long, not 33 digits. In a call Mr A made to HMRC on 17 June 2021, HMRC noted the reference as a 33 digit one, and other calls refer to an ‘IR mark’. The 33 digit number is exactly the same as 32 digit one, with an additional digit at the end. While it is not clear what the reason for this discrepancy is, HMRC consider only an IR Mark has been provided. An IR Mark is not evidence that the tax return was submitted. A missing Correlation ID would have alerted the accountant that there was a problem with the submission of Mr A’s tax return.
23. In the absence of evidence of a Correlation ID, we accept HMRC’s view that Mr A’s accountant did not successfully submit his tax return until 5 March 2021. Therefore, HMRC’s position is he did not meet the rules for the fourth and fifth grants for SEISS, which require a tax return to be submitted by 2 March 2021. This appears to be in line with our Principles, which say decision making should take account of all relevant considerations, ignore irrelevant ones and balance the evidence appropriately.
24. Mr A also does not appear to meet the criteria set out in the SEISS discretion guidance. This is because we saw no indication he demonstrated that HMRC made an error. This means HMRC’s decision not to pay the SEISS grants appears to be reasonable.
25. Mr A was understandably confident that his tax return was submitted in time, and we recognise that missing out on these two SEISS grants had a significant financial impact on his livelihood.
26. For the reasons mentioned above we did not see any indication HMRC did anything wrong here and this means we have decided not to take any further action on his concerns. We hope he finds these explanations helpful.