As you will have no doubt seen in the press, there are concerns that up to £3.5 billion pounds in Job Retention Scheme (‘JRS’) funds may have either been claimed incorrectly or fraudulently.
The press speculation has increased the pressure on HMRC to urgently review JRS claims and there have been some important developments in relation to the planned enforcement activity that has been taking place over recent weeks:
- All Large Business Service customers (approximately 1,200) who have made claims will be contacted by their Customer Compliance Manager (‘CCM’) and will be given 30 days to confirm compliance with the JRS rules;
- 27,000 to 30,000 targeted letters / emails are in the process of being issued by HMRC to employers in what HMRC are calling a ‘prompt’ campaign – this is to encourage employers who have received JRS grants when they shouldn’t, or where errors have been made in their calculations, to repay / self-correct. We understand that these letters are based on:
- Data analysis of claims and RTI records. HMRC do not reveal what aspect of the claim causes concern so employers need to review all aspects of their claims;
- Complaints to the whistleblowing hotline (which has had over 8,200 calls) that we understand mainly relates to employees working whilst on furlough.
I understand that, where employers confirm to the helpline or CCM that their claim is correct, they will be asked to follow up in writing. HMRC will then carry out the appropriate intervention to undertake compliance checks and officers are being trained to do this.
I believe employers have until 20 October to advise HMRC as to whether they have overclaimed. Failure to do so could result in significant penalties as well as the possibility of some form of naming regime similar to that used under National Minimum Wage compliance.
The good news is that HMRC do appreciate that JRS has been extremely complex and with the legislation/guidance issued quickly, employers may have arrived at views that differ to their own. HMRC have confirmed that they do not wish to be pedantic and it is likely that genuine errors where employers have taken steps to comply with the rules will not be subject to penalty. To support that the appropriate steps have been taken to comply with the rules, employers should take this opportunity to review all aspects of their claim and ensure they have robust evidence to support the positions they have taken.
The views expressed are the author’s and not ICAEW’s