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Overclaimed on a furlough? You need to let the taxman know

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You only have until 20th October to make HMRC aware if you have overclaimed for the Coronavirus Job Retention Scheme grants, reveals Josh Ruthven from Nottingham accountants Page Kirk. It's important to watch out for penalties and take care to avoid them.

New legislation means that HMRC are now able to recover Coronavirus Job Retention Scheme grants which have been overclaimed by employers. They are actively looking at potential incorrect claims and will take action to put them right. If you don't let HMRC know about your potential overclaim, then penalties may be charged.

What are the deadlines for reporting overclaimed grants to HMRC?

There is new guidance from HMRC saying there is a notification period in which an employer needs to let the Revenue know if they have overclaimed a CJRS grant and not yet repaid it. This period ends 90 days after you receive the CJRS grant you are not entitled to; or 90 days after the date circumstances changed so that you were no longer entitled to keep the CJRS grant (for example if you continued to receive a CJRS grant for an employee after they left your employment); or on 20 October 2020, whichever of the two dates is later.

If you do not let HMRC know within the notification period, then you may be charged a penalty.

How do you pay an overclaim back?

If you claimed too much through the CJRS, or you would like to make a voluntary repayment because you do not want or need the grant to pay your employees' wages, tax and National Insurance contributions, you can either:

  1. Correct it in your next claim, although this is under more of a time constraint with the CJRS drawing to a close on 31 October 2020; or
  2. Contact HMRC to get a payment reference number and pay HMRC back within the next 30 days. This applies if you are not making another claim, or the claim is not large enough to offset.

If you would like to discuss anything in this blog in more detail, then why not get in touch with Page Kirk? Just call us on 0115 955 5500 or email enquiries@pagekirk.co.uk