SEISS cash flow crisis to hit self-employed as HMRC tax return deadline looms

SEISS cash flow crisis

The Accountancy Partnership encouraged self-employed business owners to complete their Self Assessment tax returns well ahead of the January 31 deadline, to give them as much time as possible to understand their financial position and plan accordingly. It warned 2.9 million self-employed individuals are facing the prospect of a cash flow crisis in the coming months as the deadline looms.

Nearly three million self-employed individuals whose businesses were affected by coronavirus may have to return all, or part, of their SEISS grants, despite continuing volatile trading conditions. This could impact those who claimed from early on in the pandemic particularly hard.

Some freelancers who claimed support from the grant during coronavirus may not have been impacted by the pandemic as heavily as they first thought. However new challenges, including rising energy bills, interest rates, and cuts to Universal Credit, could see them face further difficulties. Along with the additional prospect of having to pay back part of a previous grant, it could lead to serious solvency problems.

In total, just over £25billion in financial support was accessed by contractors, freelancers, and other self-employed people across five SEISS grants, in the last 18 months or so. HMRC recently issued new guidance warning that some, or all, of the funds may need to be paid back if they suffered less than anticipated – or individuals might face a penalty.

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