Furlough grant – claimed too much or not enough

Announced on 20th March 2020, the Coronavirus Job Retention Scheme has helped save over 9.5 million UK jobs and aided keeping Britain paid.

Employers could claim 80% of reference pay plus the employer aspects of National Insurance and the employer minimum banded Pension Contributions.

The guidance has evolved and developed with many revisions.

Employers anxious to survive the pandemic will have been under pressure to quickly calculate and make grant claims to survive.

Errors along that journey are likely, and those with more criminal intent may have attempted to fiddle the system to obtain ‘free money’.

New guidance (and associated law) requires employers to verify their calculations and notify HMRC of errors.

If you’ve overclaimed a grant and have not repaid it, 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 not longer entitled to keep because your circumstances changed
  • 20 October 2020

If you do not do this, you may have to pay a penalty. If you do repay any overclaimed grant, this will prevent any potential tax liability in respect of the overpayment of Coronavirus Job Retention Scheme. We will not be actively looking for innocent errors in our compliance approach.

What if we have claimed too little?

HMRC provide the following guidance:

If you have made an error that has resulted in receiving too little money, you will still need to ensure you pay your employees the correct amount. You should contact HMRC to amend your claim. As you are increasing the amount of your claim, we may need to conduct additional checks.

After 31 July, you will no longer be able to amend a claim relating to the period up to 30 June to add an employee that should have been included on a claim submitted before that date. You must make sure that any remaining claims still to be made for the period to 30 June include all of your eligible employees. Amendments for any other errors you made that resulted in you not claiming enough will still be permitted after 31 July.

PAYadvice.UK 29/7/2020

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