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Home » News & Insights » HMRC Must Be Notified Of Furlough Overclaims Within 90 Days

HMRC Must Be Notified Of Furlough Overclaims Within 90 Days

Posted on 10th September 2020

The calculation of Coronavirus Job Retention Scheme grants has proven to be complex, particularly as HMRC frequently changed the rules and the method of computation. Consequently, many errors have arisen and need to be corrected. The latest Finance Act requires employers to notify HMRC within 90 days where it turns out that they were not entitled to receive the furlough grants and there is a penalty for failure to notify them.

HMRC has said that it will be lenient in relation to genuine mistakes, and that penalties will be charged only in cases of deliberate non-compliance.

 HMRC Have Already Identified Numerous Fraudulent Claims

HMRC’s CJRS fraud reporting portal had received over 2,000 reports of wrongful claims.  

Examples of such wrongful claims include;

  • Claiming furlough payments for staff who are continuing to work
  • Furloughing staff but asking them to work “voluntarily” on an unpaid basis.
  • Claiming furlough payments for “ghost” employees, and those who left employment before 19 March 2020. 
  • Not passing on the full amount of furlough pay to staff. 
  • Failing to account for PAYE tax and NIC in relation to furlough payments

HMRC also have the power to transfer CJRS penalties to the directors of an insolvent company if their company does not pay them. 

We therefore suggest that employers should check the accuracy and validity of their CRJS claims as a matter of priority, particularly where payroll is handled internally, and ensure that any inaccuracies or errors are disclosed to HMRC as quickly as possible.

We can of course assist you in checking claims, please call MJB Avanti on 08000 388799 for further assistance.

Source: 2020 Innovation

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Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

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