COVID-19: Understanding the claims process for the newly self-employed seeking financial support from the Government (1 of 2)

For many months now there’s been a growing outcry from many recently self-employed business owners (the so-called ‘Excluded’) who, for whatever reason, found themselves unable to access the various Government support packages designed to assist companies during the pandemic. This anomaly affected many new traders who started their business in 2019/20 but had yet to submit their first tax return.

The Chancellor announced in the recent Budget that up to 600,000 self-employed people would now be finally eligible to claim the fourth and fifth SEISS grants so long as they had submitted a tax return by 3 March 2021.

At the time Mr Sunak made his Budget statement, details were somewhat vague around the claims process for first time claimants, and these are now beginning to emerge.

For anyone seeking to access financial support under the SEISS it’s important that you understand what steps are required to make a claim as HMRC will seek verification on your identity in order to prevent fraudulent claims.

There are a number of steps you will need to complete in order to access the next two SEISS grants:

1. HMRC will send out a letter to first time tax return filers which should arrive between 10 March and mid-April. It’s essential the HMRC letter shouldn’t be ignored as there is a limited window that you will need to act upon. Click here to access a copy of the letter you will be receiving
2. An HMRC representative will call you on the contact number given on your 2019/20 tax return. This call will be made within two weeks of the letter being sent out and it will come from an ‘unknown number’ – it’s important that you speak to the HMRC officer as part of the pre-verification checks. HMRC will make only three attempts to call between 8am and 5.30pm. If none of those three attempts are successful the taxpayer will have failed the pre-verification so it’s important that HMRC has the correct telephone number (also, if your agent’s number was shown as the contact point on your tax return, HMRC will ask the agent to pass on the correct client telephone number). If you need to correct/update your telephone number, you can do so by calling 0800 024 1222
3. When you speak to HMRC you must confirm or supply your email address. You will also be asked to agree to receive a link to a Dropbox[1] account to that email address
4. When you receive said email from HMRC with the Dropbox link you must open this email promptly (it’s sensible to check your junk folder to ensure that this email doesn’t end up there)
5. You will need to have ready access to digital copies of your ID (such as your photo driving licence/current passport) along with three months’ business bank statements from 2019/20 in order to demonstrate that the new business has been active in 2019/20. If you don’t have a business bank account, HMRC will accept other documents but these must be agreed on the call
6. Important: You have only two days to upload the digital copies of your ID and bank documents to the HMRC Dropbox. If you fail to do this, the Dropbox link will expire and you will fail the pre-verification. You may wish to consider gathering this information in advance
7. The online portal to apply for the fourth SEISS grant will open in late-April (HMRC has not yet confirmed the exact date) but all seven steps of the pre-verification process need to be completed before you can make your claim. Tax agents/advisers cannot submit SEISS grant claims on your behalf.

[1] A Dropbox is an online platform where electronic documents can be deposited securely online.

Chris Bowles, a director at Old Mill’s Wells office comments ‘This complex process appears to have a number of potential flaws and may present challenges for many newly self-employed business owners who may not be familiar with what’s required or are unaware of the very tight deadlines attached to some of the steps involved in the pre-checks.

‘There are a number of areas where things can go wrong (just opening a brown envelope from HMRC for instance), and I have real concerns that some people may have difficulties negotiating these pre-verification checks or inadvertently miss deadlines.

‘There’s also a fear that many traders will see this HMRC call as another sophisticated attempt to obtain sensitive personal information at a time when attacks from scammers are widespread.’

For further information please contact your usual Old Mill adviser or click here…