Self Employment Income Support Scheme: HMRC miscalculations

HMRC has miscalculated thousands of grants given to the self-employed to help them through the coronavirus crisis.

HMRC confirmed that around 16,200 grants, which make up around 0.6% of the total applications received, were either too high or should not have been paid out at all.

£7.8 billion was handed out during the first tranche of the scheme which equates to around £47 million of taxpayers money being overpaid to the self employed.

By way of an example, some individuals received £1,161 too much and were actually due only £67.

The full details from HMRC have yet to be released but in the meantime, HMRC are now paying out the second tranche to applicants.

Changes to the 2nd payment

The second tranche applications opened this week on Monday and HMRC have now written to all those self employed affected by the error.

Affected individuals will not be asked to repay any over payment received from the first tranche, but should expect a lower sum if they apply for the second grant.

However, many of those who applied for the first grant do not plan to apply for the second grant as trading in their business has started up again, so it is unclear how much of the estimated £47 million will be able to be recouped.

HMRC have confirmed they will not reclaim any over payments to avoid unnecessary hardship to taxpayers who may have already used the money.