Organisations that have overclaimed a Job Retention Scheme grant and have not yet notified HMRC should act now. You must notify HMRC by the latest of either:
- 90 days after the date you received the grant you were not entitled to
- 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed
- 20 October 2020.
If you do not do this, you may have to pay a penalty. The repayment of the overclaimed grant will prevent any potential tax liability in respect of the overpayment. HMRC will look for incorrect claims and tackle deliberate non-compliance and criminal attacks. If you knew that you were not entitled to the grant and did not notify HMRC, the law treats this failure to notify as deliberate and concealed. HMRC can charge a penalty of up to 100% on the amount of the CJRS grant that you were not entitled to and can pursue criminal investigations. If a company becomes insolvent and Directors were aware of overpayments they may be personally liable for the charge.
With the complexity of the scheme and the numerous changes made to it, coupled with the speed of introduction, it is inevitable that mistakes have been made. We are finding a range of errors having been made by organisations, most commonly:
- JRS claim using pre-salary sacrifice figures
- average pay calculated includes discretionary payments
- incorrect use of average pay
- employees holiday used for furlough only
- incorrect day counts
- pension claims not at correct basic level
- claiming NIC and employment allowance at same time
- employees doing employment tasks while on furlough
- not reducing furlough amounts in line with HMRC guidance, no NIC or pension and 70%
If you have any queries or need assistance in checking your claims or reporting overclaims please contact Stephen McConnell, Business Services Partner Email: stephenmcconnell@bakertillymm.co.uk or Tel: 028 9032 3466