The Coronavirus Job Retention Scheme (CJRS) or furlough scheme has been an important lifeline for many businesses. Since it launched in April, the scheme has paid out £35bn and been used by 1.2 million employers, enabling 9.6 million jobs to be furloughed. However, HMRC estimate around 3.5bn has been claimed fraudulently or by mistake.

HMRC are asking those that have used the system to revisit and check the claims that have been made. If you find a mistake or realise you should not have claimed for certain employees during a period you have until the 20th October 2020 to advise and make arrangements to repay HMRC.

Investigation

If businesses who incorrectly claimed CJRS payments don’t use the amnesty period they could face investigation and fines. Penalties, could be up to 100 per cent, if the error was deliberate and concealed, and will not be less than 30 per cent. HMRC is likely to look at other aspects of a business’ tax affairs. This could trigger a full tax investigation which takes up valuable management time and energy, something that businesses have little of as they try to get back on their feet. It should also be remembered that HMRC has confirmed that it will criminally prosecute in appropriate cases.

Should you be investigated we will be there to support you. However, a tax investigation is not included in our normal fees and the costs involved can be substantial.

We run a Tax Investigation Service to help protect clients against the professional costs involved in a tax investigation or enquiry. This service is backed by an insurance policy we have taken out in our own name. If this is something you might be interested in please contact us without delay to discuss the details.

Job Support Scheme Changes

For the new Job Support Scheme (JSS) HMRC is putting in 2 significant changes, firstly it will hold payments while checking claims. Secondly they will inform employees directly about the claims made. If you intend to use the JSS please make sure you have a written agreement in place with your employees.

If you have questions or need some advice please get in contact. We are here to support you!