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Quarterly news:

Autumn 2022

Did claims comply with the furlough scheme?

1,100 HMRC staff, a set of FAQs and a negative outcome for a business at the tax tribunal. What’s the common factor?

The answer is – they all demonstrate HMRC’s approach to claims made under the Coronavirus Job Retention Scheme (CJRS or furlough scheme).

Risk profile

It’s an approach summed up in a recent policy paper on errors and fraud in Covid support schemes generally: ‘We are not writing anything off and will continue to prioritise the most serious cases of abuse. HMRC has legal powers to recover this money up to 20 years after the event.’

HMRC is heavily involved in the Taxpayer Protection Taskforce investigating this area. Although HMRC stresses that it is not actively looking for innocent errors, CJRS compliance activity is very much live and it is important for businesses to look back and check past claims and supporting calculations.

HMRC has published FAQs showing its position with regard to common errors in furlough calculations. It focuses on instances where calculations were made using methods other than those set out in HMRC guidance, and highlights areas where an error means a claim should be corrected, and where, with certain provisos, it doesn’t.

High on the ‘must correct’ list are errors where an employer failed to take reasonable care following HMRC guidance available at the time of the claim. On the other hand, if an employer relied on incorrect HMRC advice, in certain specific circumstances, claims may not require correction. Please contact us for further details.

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