This week HMRC have revealed that up to £3.5bn in Coronavirus Job Retention Scheme (CJRS) payments may have been claimed fraudulently or paid out in error.
The scheme has paid 80% of the wages of workers placed on leave since March, up to a maximum of £2,500 a month and latest data shows the programme has cost the government £35.4bn so far.
Speaking to MPs on Monday, HMRC’s permanent secretary, Jim Harra, said:
“We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%.
“That will range from deliberate fraud through to error.”
MPs have ordered HMRC and HM Treasury to explain how they intend to reduce the problem. It is anticipated where fraud is discovered the consequences will be severe.
Check your claims
Whilst HMRC have said that their priority is to support employers, we do expect HMRC to ramp up their efforts on recouping mistaken or fraudulent CJRS claims.
Mr Harra said:
“We are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time, although we will expect employers to check their claims and repay any excess amount.
What we will be focusing on is tackling abuse and fraud.”
What to do if you’ve claimed too much
Back in July, the Government announced a 90 day ‘amnesty’ for employers who get in touch with HMRC in respect of an incorrect claim.
They said:
“We understand that mistakes happen, particularly in these circumstances and have made it as easy as possible to pay back any money you received that you were not entitled to.”
How does the ‘amnesty’ work?
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 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.
To pay the money back, you can either:
- tell HMRC as part of your next online claim (your new claim will be reduced and you’ll need to keep a record of the adjustment for 6 years)
- contact HMRC to pay the money back (you should only do this if you’re not submitting another claim)
What should employers do now
Don’t panic, but act now.
Employers are strongly advised to review claims submitted to the CJRS in order to identify any inaccuracies. If you are unsure whether you have correctly used the CJRS we can help.
If you act before 20th October you can avoid HMRC penalties but beyond that, HMRC are likely to come down hard on employers who have overclaimed through the CJRS as it looks to claw back the potential £3.5bn overpaid through the scheme.
Disclaimer
The information was correct at time of publishing but may now be out of date.
