Have you or your business made a claim for support during the coronavirus pandemic?
If you have, you should be aware that following royal assent in July, the Finance Act 2020 now contains specific measures to claw back any monies claimed that were not due, plus interest and in some cases, large penalties.
Specifically, but not restricted to, if you have claimed:
– Coronavirus Job Retention Scheme payments / employee furlough support
– Self-Employed Income Support Scheme payments
– A Statutory Sick Pay reclaim for your business
– A business support grant
…you need to be confident that any claims made are robust, should they be challenged by HMRC.
HMRC will be investigating businesses to see if they have made a claim to which they were either not fully or partly entitled to. They will also be looking to see whether those businesses have in fact been adversely affected and whether the monies claimed have been used for the purpose intended i.e. to reimburse employees’ salaries or replace self-employed business income which was reduced as a result of COVID-19.
HMRC have already received thousands of reports of claims being made which are not due and have already commenced criminal proceedings against businesses who have made fraudulent claims. They are keen to make businesses and individuals aware that they will be investigating all claims where they have reason to believe a false claim has been made.
If you have made a claim, there is now a period where you can review it. On reflection, if you think it may not have been appropriate to make the claim, you can make a notification and refund the money to HMRC with no further action being taken.
The notification and reimbursement period ends on the latest of whichever date applies below:
– 90 days after you receive the grant you’re not entitled to;
– 90 days after the day circumstances changed so that you were no longer entitled to keep the grant; or
– 20 October 2020
If you do not make the notification and are later found to have made an incorrect claim, either negligently or knowingly, you will be assessed to tax at 100% on the amounts you have claimed. This will also attract interest if not paid within 30 days of the assessment being raised.
Following the raising of the assessment, HMRC will also consider charging a penalty which could be as much as 100% of the tax depending on the reasons for the claim being made.
Company officers, who knew the company had overclaimed a grant at the time it was received, or knew at such other time when a tax liability arose that the claim was overpaid or not used for the intended purpose, can be made personally liable to pay the tax charged on their companies in circumstances where the business is in insolvency and the tax cannot be recovered.
Self-employed business owners who have claimed via the SEISS should also take time to review whether their business income has actually been adversely affected by the pandemic and can demonstrate this, should HMRC challenge the claim.
Given that HMRC have paid more than £27 billion pounds throughout the pandemic to assist businesses, we expect that they will be keen to ensure any monies paid out which were not due are recovered as soon as possible.
If you require advice or a further discussion tailored to your situation, please contact Julie Walsh using the button below.
This information is correct as of 3 August 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.