Commenting on the proposed amendments to the Finance Bill on how HMRC proposes to deal with employers who have made errors relating to COVID-19 support payment claims, Dawn Register, Tax Partner at BDO said:
“The window of opportunity to correct mistakes in furlough claims or other COVID-19 support payments administered by HMRC is to be extended from 30 to 90 days. This is a welcome change that gives businesses a more realistic time period to check their claims and notify HMRC of any corrections. Given the huge volume of government guidance and changes in July already, we consider the extension to a 3 month period is crucial to allow businesses time to review claims and seek professional advice where necessary.
“The legislation will now also cover the new Coronavirus Statutory Sick Pay scheme, in addition to the furlough (CJRS) scheme, the SEISS and other COVID-19 grant schemes.
“If a company received ‘furlough monies’ which it was not entitled to then it will be subject to 100% income tax on those monies. The legislation now confirms that this tax is not payable under Quarterly Instalment Payments (QIPS), which is also a helpful clarification for larger companies.
“We expect there will be many cases where innocent mistakes are made given the difficult trading conditions for businesses during Lockdown. Also a ‘catch up’ exercise may be needed on paperwork. Businesses should start to check and double check now that their Government support claims are correct.
“We know HMRC is receiving whistle-blower reports where abuse of COVID-19 support is suspected. We expect HMRC enquiries and serious investigations will follow the 90 day correction window for those who fail to rectify any incorrect claims.
“The 90 day period will start after Royal Assent of the Finance Bill and this is expected before the end of July 2020.”
The latest Government figures show that to the 21st June, 1.1m employers have received £22.9bn under the Coronavirus Job Retention or ‘furlough’ Scheme. Meanwhile, £7.6bn has been paid out to 2.6m self-employed businesses under the Self-Employment Income Support Scheme.
Note to editors
Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.
Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy.
We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn.
BDO press office:
020 7893 3000