HMRC has identified and written to more than 3,000 employers it believes may need to repay some or all of their Coronavirus Job Retention Scheme (CJRS) grant.
Letters are being sent to businesses flagged up by HMRC’s risk assessment tools on the basis that the CJRS grant claimed may have been too high or the conditions for receiving a CJRS grant may not have been met.
HMRC has intimated that if any overpaid CJRS grant is repaid voluntarily within an appropriate time limit, the employer will not be charged a penalty for the error in their claim.
However, companies are being encouraged to respond to HMRC’s letter even if they think that their claim is correct or there has simply been a mistake.
Fiona Fernie, a tax dispute and resolution partner at Blick Rothenberg, says: “Failing to do so will mean that HMRC will instigate an investigation that could take months to resolve. HMRC are normally sympathetic if they get a response but if not, they will crack down hard.”
Companies should carry out a detailed check of any CJRS claims they have made to ensure their accuracy. This check should include both the numerical accuracy of the claims and the justification for making them.
Fiona adds: “Companies should also collate a complete set of records supporting their claims. These records should include, financial forecasts showing the impact of coronavirus on the business, evidence that furloughed employees would have continued in employment if the pandemic had not happened, evidence that the appropriate amounts have been paid to furloughed workers and evidence that furloughed employees were informed that they could not work during the period they were furloughed and that non-furloughed employees were also made aware that they could not involve furloughed colleagues in work.”
It is anticipated that more employers will be contacted in future by HMRC particularly given the significant number of businesses who have claimed under the scheme at a cost of £35 billion to the government.