Could your SEISS claims leave you in hot water with HMRC?

Feb 10, 2022

The Self-Employment Income Support Scheme (SEISS) was a scheme established by the government to support people who are self-employed or a partner in a partnership agreement through the coronavirus pandemic.

As a result, many farmers took advantage of the scheme during the very uncertain times caused by COVID-19.

The scheme has been rolled out over five rounds and claims for the fifth grant closed on 30 September 2021.

However, with the scheme drawing to a close, the government has recently started to aggressively reclaim monies which were wrongfully claimed, leaving many farmers in a vulnerable position.

The two most common forms of wrongful claim include claiming when COVID hadn’t impacted on a farm business and claiming when the business affected is a limited company.


No COVID impact

Although the SEISS was set up as a COVID-support scheme, the early rounds of grant funding didn’t require the applicant to demonstrate their business had been hit by the pandemic.

As a result, many farmers put in a claim.

Claims under the fourth and fifth round of the scheme do, however, require evidence that COVID has made a material impact on trading profits and/or revenues.

Many farmers would struggle to demonstrate this, especially arable farmers when the wheat prices have remained strong, so claims under the fourth and fifth round of funding could be regarded as suspect.

And as the government continues to aggressively reclaim these, if you have made a claim it might be time to take professional advice.


Limited company

As more farms have diversified away from their core activities in recent years, parts of the business may no longer conform to the tradition sole trader or partnership agreement.

Some of those diversification projects such as caravan and campsites have been very badly hit by the pandemic.

Whether or not a claim made under the SEISS for such activities will be wrongful or not depends on how the diversification side of the business is set up.

For example, we have seen instances where the diversification into other areas has been set up through a limited company. When the HMRC letter regarding SEISS has arrived people have not always been aware that they cannot claim relief for the loss of earnings of the company trade, although this has been the hardest hit.

Therefore, we have seen clients claim SEISS based on the drop of trade in the company rather than the farming activities and these amounts are now having to be repaid.

Professional advice

If you’ve claimed under SEISS and you’re not sure if your claim is legitimate or not, especially if you’ve claimed under rounds four or five of the scheme, it might be wise to seek professional advice.

Voluntarily paying the money back could save you some very awkward conversation with HMRC.

Whitley Simpson is one of the top 100 accountancy practices in the country with more than 90 years’ experience in agriculture. To speak to us about reviewing your SEISS claims or anything else, contact Ian Parker on or call (01295) 270200.

Agricultural Spotlight

The article is covered in our Agricultural Spotlight – click the link to read the full magazine, which keeps farmers up to date with the latest accounting changes and challenges.