It was announced on 3 March 2021 that the Furlough scheme (CJRS) has been extended until 30 September 2021.
From 1 July 2021, the level of grant will be reduced each month and employers will be asked to contribute towards the cost of furloughed employees’ wages. The government will contribute 70% up to £2,187.50 with the employer expected to contribute 10% up to £312.50.
From 1 August 2021 until 30 September 2021, the government’s contribution will reduce to 60% up to £1,875 with the employer’s contribution rising to 20% up to £625.
There is also a change to the employees for which you can claim. Currently (and up to periods ending on or before 30 April 2021) you can only claim for employees for whom you employed and made a PAYE RTI submission to HMRC before 30 October 2020.
When we reach the period starting on or after 1 May 2021, you will be able to claim for employees employed on or before 2 March 2021, so long as the employer has made at least one PAYE RTI submission to HMRC between 2 March 2020 and 2 March 2021.You do not need to have claimed for this employee before – it can be a new claim.
It should also be noted that HMRC has updated personal tax account records so that employees can see whether they were included in any claims for furlough for December 2020.
INFORMATION ABOUT THE RECOVERY OF OVERCLAIMED CORONAVIRUS JOB RETENTION SCHEME (CJRS) GRANTS.
An overclaimed CJRS grant includes any amount of a grant which:
- you were not entitled to receive
- you were no longer entitled to keep after your circumstances changed – for example, if you continued to receive a CJRS grant for an employee after they left your employment
HMRC understands that mistakes can happen, particularly in the present circumstances. They’ve made it as easy as possible to pay back any amounts of CJRS grants you’ve claimed that you were not entitled to. If you received too much because you made an error in a claim, you must pay this back; it’s easy to put right. You can tell HMRC about an overclaimed amount in your next online claim without the need to call.
If you do not plan to make any further claims, you should let HMRC know about the error and they will help you pay this back. For more information on what to do if you’ve made an error in your claim, go to www.gov.uk/guidance/if-youve-claimed-too-much-or-not-enough-from-the-coronavirus-job-retention-scheme
Under the new legislation, HMRC can recover amounts of CJRS grants you’ve overclaimed. They will look for incorrect claims and take action to put them right. By paying back any amounts you were not entitled to, you can avoid any tax liability for overclaimed CJRS grants. They will not be actively looking for innocent errors but will assess overclaims and charge penalties.
HMRC will not charge you a penalty if you did not know you had overclaimed a CJRS grant:
- at the time you received it
- when your circumstances changed – meaning when you stopped being entitled to it
and you paid it back within the relevant time period.
If you’re a sole trader or a partner, the relevant time period ends on 31 January 2022. If you’re a company, the relevant time period ends 12 months from the end of your accounting period.
If you’ve overclaimed a CJRS grant and have not repaid it, you need to tell HMRC this within the notification period. The notification period ends (depending on your situation):
- 90 days after you receive the CJRS grant you’re not entitled to
- 90 days after the date circumstances changed so that you were no longer entitled to keep the CJRS grant
or on 20 October 2020, whichever of the two dates is later.
If you knew you were not entitled to your grant and did not tell HMRC in the notification period, the law treats your failure as deliberate and concealed. This means they can charge a penalty of up to 100% on the amount of the CJRS grant that you were not entitled to receive or keep.
QHR Solutions always recommends that you keep full file details of all CJRS claims so that you can audit and make sure you have not overclaimed – avoid penalties which, at 100% can be very costly.