Date posted: 15th Sep 2020
As you may have read in the press, HM Revenue & Customs believe that up to £3.5bn of furlough monies may have been claimed in either error or in fraudulent circumstances. This is based on a government best estimate that 5-10% of the total grants were wrongly awarded.
The government has confirmed that they are looking into 27,000 potentially fraudulent claims, which follows on from an arrest last month, in connection with an alleged fraudulent claim of nearly half a million pounds.
The government believe that businesses will have made errors in claims, mainly due to the fact that the claims were a new process and the exceptional circumstances of the COVID pandemic. However there is an expectation that employers will check their claims and repay any excess amounts claimed in error. In our experience, of taxation in general, those business that have made legitimate errors will be looked at more favourably than say a business which has been involved in a fraudulent claim.
Indeed, the government have announced that they are contacting businesses and asking them to check their claims. If an error is found, then you must tell HMRC within a 90 day reporting window to avoid penalties. The deadline for making a report will be the later of:
- 20 October 2020.
- 90 days after you received the grant that you were not entitled to.
- 90 days after you received the grant that you were no longer entitled to keep because of a change in circumstances.
If you need assistance in checking your furlough claims and calculations, please contact our payroll team on 01325 349700.
Read more below:
Read more articles from our October 2020 tax news below:
- Still considering an electric company car?
- Errors in furlough claims
- Chancellor’s Winter Economy Plan
- Capital allowances – cliff edge approaching?
- Unlock funds within your company – make a R&D claim
- Retirement age and pension planning
- Get ready for leaving the EU on 1 January 2021