HMRC has stepped up compliance activity and begun to write to employers who it believes may need to repay some or all of the Coronavirus Job Retention Scheme (a.k.a CJRS or furlough scheme) grant they have claimed.
What does the letter say?
The letter says the CJRS claim made by the employer appears to be incorrect because, for example, too much was claimed, or claims were made for ineligible employees. It does not give details of the miscalculated claim figure or who the ineligible employees are.
What action is required by employers?
- Employers are being urged to review their records and their CJRS claim
- The letter asks employers to contact HMRC – whether or not they think they have over-claimed
- If the employer thinks the CJRS claim was correct, they are asked to contact HMRC by telephone
- If the employer thinks that the CJRS claim is incorrect, they are asked to reply by email, and then HMRC will provide details on how to make a formal disclosure.
HMRC acknowledges that “mistakes happen” and employers will not be charged a penalty if they voluntarily repay any overpaid grant. However, employers need to contact HMRC by the deadline stated on their letter, otherwise HMRC may start a formal compliance check which could result in employers being asked to pay statutory interest and penalties.
What if I have overclaimed and not paid HMRC back?
If you’ve overclaimed a grant and have not repaid it, you must notify HMRC by the latest of either:
- 90 days after the date you received the grant you were not entitled to
- 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed
- 20 October 2020.
If you do not do this, you may have to pay a penalty. If you do repay any overclaimed grant, this will prevent any potential tax liability in respect of the overpayment of Coronavirus Job Retention Scheme. HMRC will not be actively looking for innocent errors in their compliance approach so employers are urged to highlight accidental errors.
What should I do if I receive a letter from HMRC?
If you receive a letter like this from HMRC or have any questions or concerns about the CJRS, please get in touch with your usual Mitchell Charlesworth contact who can advise you accordingly.