When the Chancellor, Rishi Sunak, announced the Coronavirus Job Retention Scheme (CJRS) on 20 March 2020, the largest wage support programme in UK history was launched. It was joined by the Self-Employment Income Support Scheme (SEISS) on 26 March 2020 and the Treasury has since spent an estimated £30 billion to support the UK economy through these two programmes alone.
Initially there were some anomalies in the schemes, especially regarding what could be claimed and the terms of furlough, what constitutes training, qualifying periods and salaries, flexible working and other criteria. It is therefore inevitable that some employers will have made genuine mistakes with their claims. This could be blamed in part due to the initial guidance being unclear and then being amended by frequent updates and changes.
HMRC now has the task of tackling incorrect and fraudulent claims for COVID-19 support payments through both schemes. Under new rules passed in the Finance Act 2020, HMRC have begun to check claims made by businesses and where claims have been made incorrectly for any reason, they can impose hefty penalties, and fines, in addition to reclaiming the amounts paid to them. We understand that HMRC have already identified 27,000 claims where they believe incorrect or fraudulent claims have been made.
Under current rules they have six years to make these checks and if fraud is suspected for 20 years!
Therefore, we urge all employers to check the furlough pay claims they have made to ensure these are correct before HMRC starts its clawback regime.
Likewise, self-employed individuals who have claimed under SEISS should also review their claims.
Amnesty period
HMRC has extended the time in which employers can correct any mistakes and amend their claims without incurring penalties:
Coronavirus Job Retention Scheme
HMRC must be notified by the latest of:
– 90 days after the date they received the grant they were not entitled to
– 90 days after the date they received the grant that they were no longer entitled to keep because their circumstances changed
– 20 October 2020
Self-Employment Income Support Scheme
HMRC must be notified by the latest of:
– 20 October 2020
– 90 days after they received the grant
– Payment of the outstanding balance of any overclaim is to be made in full by 31 January 2022
What should you do now?
The key is not to panic but act quickly.
We are strongly advising all of those who have made a claim to review their submissions in order to identify any inaccuracies.
If you need to report any errors for a Coronavirus Job Retention Scheme claim, please use the link here. For the Self Employed Income Support Scheme, you should use this link.
We can help
If you believe that you may have been overpaid under either the CJRS or SEISS or that the money you received was not used correctly to pay your workers’ wages, then please let us know as a matter of urgency and we can help you to address the position with HMRC.
It is important to appreciate this doesn’t just apply to deliberate fraud but also to incorrect grant claims so if you believe that an amount claimed was incorrect for whatever reason, the time to rectify this is now.
For advice, please contact PM+M’s Julie Walsh using the button below.
