The most basic conditions of the Coronavirus Job Retention Scheme (CJRS) is that your business is / will be adversely affected by Covid-19 and that employees on furlough are not allowed to do any work whilst on furlough. 

A “snitch line” for false furlough claims has already seen thousands of reports and as a result it is inevitable that HMRC will be doing the rounds for years demanding back support that was claimed fraudulently.

HMRC are about to given powers to impose a tax charge of 100% of the CJRS grant where it is proven that it was not due. In other words to repay the full amount. What remains to be seen is how the error will be penalised. Most enquiries by HMRC levy a penalty based on the amount of tax raised ranging from 10% up to 200% in the most deliberate cases. As such it is likely that the money will have to be repaid but also a significant additional penalty will be raised.

It would appear however that there is to be an amnesty for employers to voluntarily repay monies that should not have been claimed, where that employer notifies HMRC within 90 days of when Royal Assent is granted to the Finance Bill, or when the income tax became chargeable. The bill is expected to receive Royal Assent later this month.

This gives employers who blatantly breached the rules a chance to correct their actions. Also it gives employers a chance to make sure they have not accidentally fallen foul of the rules. How many people marked their status on Linked In to “On Furlough” but continued to post marketing and advertising content on behalf of their employer for instance. 

As always, get in touch for more info on how to voluntarily repay monies that should not have been claimed.