Guidance on Coronavirus Job Retention Scheme and Fraudulent Claims
Published: 22/09/2020 By Sarah SchendelThe CJRS is the UK government's flagship support measure for organisations during the COVID-19 pandemic. It offers grants to cover a proportion of the wages of furloughed staff. The CJRS ends on the 31 October 2020 and claims must be made on or before 30 November 2020.
Currently during September, the grant will cover the monthly salary cost for fully furloughed staff to 70% (up to £2,187.50.) Employers will pay 10% of wages for the hours employees don't work plus Employer National Insurance Contributions (NICs) and pension contributions.
From 1 October 2020 the percentage covered will be reduced to 60% (up to £1,875.00.) Employers will pay 20% of wages for the hours employees don't work plus Employer National Insurance Contributions (NICs) and pension contributions. CJRS will end on Saturday 31 October.
The latest data from HM Revenue & Customs (HMRC) has revealed that up to £3.5 billion in CJRS claims were either fraudulent or paid out in error. The Government has paid out £35.4 billion through the furlough scheme since its introduction. Approximately 9.5 million people have been placed on furlough leave at some point since its introduction, and HMRC is now looking to crack down on employers that have committed ‘furlough fraud’. As per the conditions of the CJRS, if an employer has asked an employee to carry out any work whilst on furlough leave, then they will need to prove that whatever they asked them to do was not making money for them or any other businesses that may be linked, or providing services to them.
If you believe you could have made an incorrect claim under the CJRS, the responsibility is on you to correct the claim. HMRC have published guidance setting out what you should do if you have claimed too much or not claimed enough under the scheme.
What to do if you have claimed too much
The action that you need to take if you believe you have claimed too much under the CJRS depends on when you made the claim and whether you will be making further claims under the scheme. There is a 72 hour window in which a claim can be deleted from the online claim service. Once this time interval has elapsed, if you have claimed too much under the scheme, HMRC needs to be informed. If you will be making another claim under the scheme, this can be done in your next claim by adjusting that claim for the amount that you have over claimed. If you need to do this, you must keep evidence of the adjustment that you have made for six years. If you are not planning to submit another claim, you should contact HMRC on 0300 322 9420 to arrange how to pay the money back.
Deadline for telling HMRC about an overpaid grant
To avoid being charged a penalty, you must tell HMRC about any overpaid grants under the scheme by latest of:
• 90 days from the date on which you received the grant to which you were not entitled.
• 90 days from the date on which you were no longer entitled to keep a grant that you had claimed because your circumstances had changed.
Repaying any overpaid grant within this time frame will prevent a potential tax liability in respect of the over-claimed amount from arising.
What to do if you think you have not been paid enough
If you have made a mistake in working out your claim under the CJRS, you may have not claimed enough money. Where this is the case, you should contact HMRC by telephone on 0800 024 1222 to amend your claim. Even if you have not claimed the full amount to which you are entitled back from HMRC, you must pay your employees the correct amount. Where a claim is increased, HMRC could carry out additional checks on the validity of the claim.
Penalty for failing to tell HMRC about an overpaid grant
If HMRC are not informed about an overpaid CJRS grant by the notification deadline, you may be charged a penalty for failing to notify them. The amount of the penalty will depend on whether you knew you had been overpaid and whether you attempted to conceal it. HMRC have stated that they will not charge a penalty if you did not know that you had been overpaid at the time, or if your circumstances changed so you stopped being entitled to the grant, as long as it is repaid by 31 January 2022 (for sole traders) or within 12 months from the end of your accounts period (for companies).
turpin barker armstrong are more than happy to help you with any advice. Please speak to us about how we can help you check any claims made under the CJRS. You are welcome to contact us by phone on 0208 661 7878 or email firstname.lastname@example.org