Businesses urged to act ahead of HMRC furlough investigations as latest scheme statistics published

David Yewdall, partner in the Employer Solutions team at Tilney Smith & Williamson, the wealth management and professional services group, comments on today’s publication of the latest Coronavirus Job Retention Scheme statistics:

“The Coronavirus Job Retention Scheme (CJRS), which provided support for paying the wages of staff on furlough, may have closed on 30 September 2021, but new statistics published by HMRC today give a clearer picture of how the scheme was used, given that employers have been able to continue making claims if they have a reasonable excuse for being late with their submission. The latest update, which takes into account all claims submitted to HMRC by 21 November 2021, reveals that since the start of the scheme a total of 11.7 million jobs have been supported by the CJRS at various times from 1.3 million employers.

“Concluding the process of reviewing claims and payments made through the CJRS is expected to take some time and we know that HMRC is investing significant amounts of resource within their Taxpayer Protection Taskforce in tackling fraudulent and widespread errors in claims made. We are already seeing numerous enquiries raised into suspected overclaims. Due to the complexity of the CJRS support calculations, combined with how fast the CJRS was rolled out, even businesses that had full confidence in the accuracy of their claims have received HMRC enquiry letters.

“Businesses are strongly advised to act ahead of receiving an enquiry from HMRC. A review of your CJRS claims now by employment tax experts could avoid a longer, more expensive, process later, even if claims were made in good faith. Should an error or overclaim be identified during a review, we would usually recommend that a voluntary disclosure is made to HMRC. Businesses that proactively manage their tax affairs and seek to rectify errors without undue delay are considered lower risk by HMRC. A voluntary disclosure could therefore impact the amount of any penalty, or whether it is to be levied at all.

“With Covid cases now surging again, there remains a real question as to whether the Treasury will need to bring back some form of the furlough scheme in the new year. Many businesses are already seeing a drop in demand as some of their customers choose to stay at home and the government has not ruled out introducing further restrictions.”