The self-employed income support scheme (SEISS) grants were welcomed when they were distributed during the Covid-19 pandemic. Each recipient had to meet three conditions:

• traded in 2019-20;
• intended to continue to trade in 2020-21; and
• trade was adversely affected by Covid-19.

HMRC is now examining the 2019-20 tax returns of taxpayers who received SEISS grants to check whether their self-employed trade was carried on in that year.

If you claimed an SEISS grant but ceased trading permanently in 2019-20 you should repay the grant as you were not eligible to claim it. Penalties may be imposed if the grant is repaid later than 90 days after it was received.

If you had a temporary break in trading and restarted the same or a different self-employed trade you would still meet the SEISS conditions. Taxpayers who took a break from self-employment due to maternity or adoption leave in 2019-20 are treated as if they continued to trade throughout the period.

HMRC is now writing to SEISS claimants:

who have not submitted their 2019-20 tax return; or

whose 2019-20 tax return does not include any self-employed income.

If you receive one of these letters you will have 30 days to submit or correct your 2019-20 tax return or repay the SEISS grants you have received in full. We can help you respond to HMRC.