Job Retention Scheme - HMRC Audits

HMRC have been increasing their activity and investigation work in terms of the Coronavirus Job Retention Scheme (CJRS) in recent weeks and in advance of the repayment deadline,

Key points are:

• HMRC have received around 8,000 calls to their CJRS hotline since its introduction, of which majority of calls have been made from workers who have been made to work whilst being on furlough.
• HMRC are sending out around 3,000 nudge letters per week to businesses they either deem to have abused the scheme or may have.
• There are currently around 27,000 high risk cases where HMRC deem there to have been a ‘Serious Error’.
• Businesses have so far returned approximately £250m back to HMRC either where they did not need it or took it out it error.

Therefore, the pressure has increased on businesses to ensure that they have their house in order if and when HMRC come calling!

HMRC Investigations

There are various ways HMRC may investigate either wrongful or fraudulent claims, such as:

• Criminal Prosecutions (Out and out fraud or following on from a civil investigation)
• Civil Investigations

HMRC would normally opt for a civil investigation which allows them to utilise their powers in terms of requesting information. Therefore, it is important to start preparing all the relevant information and documentation.

So, what do you need to consider?

• Businesses can make an adjustment via their next claim prior to the 20th October 2020 or 90 days from the date of the claim where they believe they have made an innocent mistake when claim CJRS grant, doing so would mitigate any formal investigation process and the penalties regime or you could get a payment reference number in the event that you aren’t due to make another claim.

Guidance can be found here

• Were any employees asked to work whilst being on furlough? Did senior managers or branch managers know about this?
• Businesses also need to prepare any evidence to support their claim for CJRS and establish whether there was a business case for ‘hardship’, for example:

• Did you pay out any dividends or bonuses to senior people whilst making CJRS claims??

Aspire Comments

Although several businesses may have claimed the CJRS grant in a panic or made an overclaim mistake. HMRC are and will continued to increase their activity in this area.

It is imperative the businesses repay the overclaimed monies prior to the deadline. Whilst it will still be possible to make repayments after such date, doing so will leave you open to potential formal processes and the penalty regime.

Businesses should now be preparing all information regarding their business cases for making such claims, initiating conversations with their central management teams to establish whether or not employees were working during the period of furlough and decide whether or not they need to make adjustments prior to the deadline.   

We are also seeing an increased number of employees raising formal grievances about the payment of furlough payments and this could lead to calls to the HMRC helpline.

If you require any further guidance about this or help with any other employment tax or human resources matter, please get in touch with one of our advisors on 0121 445 6178 or email enquire@aspirepartnership.co.uk.