Tax authority steps up compliance activity among those who may need to repay grants
HMRC has written to 3,000 employers as part of its risk assessment and compliance activity over claims made to cover the wages of furloughed staff under the Coronavirus Job Retention Scheme (CJRS). Latest government figures suggest that 9.6m jobs have been furlough by 1.2m businesses and a total cost, since the scheme was introduced of £34.7bn.
According to the ICAEW’s Ta Faculty, HMRC has been risk assessing CJRS applications in real time but is now starting the next phase of its compliance activity, writing this week to about 3,000 employers it believes may need to repay some or all of their CJRS grant.
HMRC advises that these letters are going to cases where:
• The business may have claimed more CJRS grant than they are entitled to
• The business may not meet the conditions to receive a CJRS grant - for example, by including employees in their CJRS claim who are not eligible.
The letter asks businesses to review their CJRS claims and to contact HMRC - whether they think they have made a mistake or not. If any overpaid CJRS grant is repaid voluntarily within the appropriate time limit, the employer will not be charged a penalty for the error in their claim.
The faculty said that ‘it is clear that HMRC will take action against those that deliberately set out to defraud the system or claim money they are not entitled to. However, its aim is not to target innocent errors’.
ICAEW’s Tax Faculty understands that these letters are the first stage of HMRC’s compliance approach and that more employers may be contacted in the future. Agents will receive copies of the letters if they are authorised as the payroll agent.