The Government’s Coronavirus Job Retention Scheme (CJRS) is drawing to a close and will finish on 31 October 2020. Read our full CJRS guidance for further information.
HMRC has wasted no time formally starting its compliance activity challenging businesses on their CJRS claims. This follows last month’s Royal Assent of the Finance Act, which includes legislation empowering HMRC to tax & clawback COVID-19 support payments under the furlough (CJRS), SEISS & other schemes.
HMRC continues to receive tip offs about incorrect claims – almost 8,000 at the last count, as reported recently by i News.
HMRC can use its powers to undertake criminal investigations with a view to prosecution - one person was arrested for alleged furlough fraud last month. However, we mostly expect HMRC to use its civil powers.
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A time saving calculator that allows our specialist employment tax team to assist you with calculations for your entire furlough population.
CRJS Process Risk Review Tool
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HMRC is now writing to employers about their furlough claims in advance of the 90 day deadline to notify or repay excessive claims. The recent update from the ICAEW discusses HMRC activity and asserts that this week they have already contacted over 3,000 employers.
These letters are sent following HMRC’s risk assessment process. This is likely to be the first of several batches. Whilst HMRC is currently encouraging employers to meet the 90-day deadline, we expect HMRC to subsequently focus on cases where it can charge significant failure to notify penalties on employers who either knew they were making incorrect claims or who retained the furlough money despite not being entitled to do so.
Read Helen Adams & Richard Morley’s article in Tax Journal which outlines the new regime empowering HMRC to recoup payments made to businesses under the CJRS and furlough schemes and charge penalties thereon. The article also outlines when amounts need to be included in income tax or corporation tax returns.
Read Richard Morley's recent article for HR Adviser which analyses HMRC's strategy to tackle incorrect and fraudulent claims for COVID-19 support payment.