23 September 2021
Update on Coronavirus Job Retention Scheme (CJRS)
HMRC is taking tough action against Furlough Fraud
The Coronavirus Job Retention Scheme (CJRS) will come to an end on 30 September 2021 and as the scheme comes to a close it has been reported widely that HMRC will be looking to recoup money that may have been overclaimed through the various COVID-19 support schemes including the (CJRS).
In the 2021 Spring Budget, the Chancellor announced the government's pledge to tackle tax fraudsters, by granting an investment of £100m to HMRC to allow it to set up a new taskforce of over a thousand investigators made up of officers drawn from across HMRC to review CJRS claims.
It is estimated that there is anywhere between £3.5bn and £7bn which has been incorrectly claimed and the HMRC’s new taxpayer protection taskforce has now begun conducting checks on around 30,000 mid-sized businesses as HMRC shifts its focus to recovering amounts from incorrect claims.
These cases will be checked, and if HMRC suspect CJRS furlough fraud or an incorrect claim has been made they will write an enquiry letter asking you to provide them with a full disclosure.
The HMRC enquiry letters are accompanied by a request asking for detailed information on every employee for whom furlough monies were claimed. The letters usually give a short timescale to provide information and copies of the letters will not necessarily be sent to the employer’s Agent.
Ignoring such letters may turn out to be an be an expensive mistake. If no response is made to the initial enquiry letter, HMRC may issue a formal ‘information notice’ to obtain the details it needs for the compliance check and if this step is taken it may detrimentally affect the amount of any CJRS penalties charged should any errors in the claims made be found.
It should be noted that the most recent versions of the corporation tax and self-assessment tax returns both include boxes to disclose the CJRS payments the employer has received, giving an opportunity at that time to include a figure for any CJRS overclaimed in error.
It is likely that HMRC will issue enquiry letters where CJRS amounts entered onto tax returns do not correspond with the Revenue’s own records, or where it is of the opinion that any correction figure entered on the return is inaccurate. If such an enquiry letter is received before a return for the applicable period is submitted, it is crucial that the CJRS figures for the return are checked in full as part of the ongoing response to the enquiry.
If you receive one of these enquiry letters from HMRC, or believe you may have overclaimed via one of the Government support schemes - we recommend you contact us at your earliest opportunity.
If you would like help or advice on this or any other tax issue, please do not hesitate to contact us. click here
Author
Mark Roe
Director
