30 days to declare erroneous Coronavirus support claims

Under draft legislation forming part of the Finance Bill 2020, employers will be given 30 days to ‘confess’ to erroneous Coronavirus support claims. This includes abuse of the furlough scheme.

HMRC to pursue those exploiting Coronavirus support

HM Revenue & Customs (HMRC) are pursuing those employers and businesses who have deliberately exploited the support offered by either the Coronavirus Job Retention Scheme (CJRS) or the Self-Employed Income Support Scheme (SEISS).

The approach is likely to be ‘two-pronged’, consisting of targeted investigations, and random compliance checks.

More than 2,000 employers have been accused of furlough fraud by whistle-blowers, so targets are not in short supply.

Legislation is being fast-tracked to allow HMRC to reclaim any furlough grant that is overpaid to employers. Likewise, grants not spent on paying the wages of furloughed employees can be clawed back.

The draft legislation mentions ‘deliberate’ abuse of the system; this should be reassuring for any business that has unwittingly submitted an incorrect claim.

The recent update to the CJRS also stated that the claims portal will enable employers to declare mistakes made in previous claims. To rectify the over-claim, the amount can be offset against the amount claimed for in the next period.

Keeping records of claims made under the CJRS

The Government has updated the CJRS guidance regularly. However, it has always been clear that furloughed employees must not do any work for their employer. This remained the case until the new ‘flexible’ rules took effect on 1 July.

If an employer has asked an employee to carry out any work, they will need to prove that this was neither:

  • Making money for them or any other businesses that may be linked, or;
  • providing services to them.

In some instances, HMRC may find it difficult to distinguish between negligence or misjudgement, and deliberate abuse.

Consequently, it would be wise for businesses and employers to review the amounts that have been claimed for so far. Accompanying calculations and documentation should also be up-to-date and easily accessible.

A business must be able to show that it has adhered to Government guidelines, if asked to evidence this fact.

To read more about the flexible furlough rules, click here.

When to seek advice

If you have concerns about any of the claims you have made under either the CJRS or the SEISS, or you would like to understand better how the new flexible furlough rules will affect you going forward, please contact us today.

Information correct at time of writing (20/07/2020). Please keep an eye on our dedicated Coronavirus page, and our Adapt, Rebuild & Recover Hub, for the very latest news and advice as we endeavour to cover the key issues affecting you and your business at this time. More information and advice is available on the Gov.uk website.

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