HMRC Letters Cause Concern
Many employers are receiving letters from HMRC claiming that their CJRS claims are incorrect. The letters are alarming as they don’t explain the error or state which month’s Coronavirus Job Retention Scheme claim is involved.
HMRC states that 5% – 10% of claims are believed to be incorrect and therefore those claims have been made illegally. It estimates the value of these mistakes and fraudulent claims to be £1.75bn – £3.5bn, which is likely to involve a large number of smaller errors spread across many claims. Holiday pay and entitlement was a particular area of confusion for many people, for example.
HMRC confirms that it will focus on fraudulent claims rather than innocent errors. However the lack of detail given within its letters to employers is causing alarm. Accountingweb reports that: “The HMRC compliance letter says the employer’s CJRS claim appears to be incorrect because, for example, ineligible employees were included, or too much was claimed for some other reason. No details are given of how much the overclaim may be or who the potential ineligible employees are. The HMRC letter doesn’t even detail which CJRS claim the employer has submitted that is suspected of being incorrect.”
HMRC’s proactive steps to combat fraudulent CJRS claims have already resulted in police action. An accountant and company director were detained on 10 September on a suspected £70,000 case of CJRS fraud.
If you receive a compliance letter from HMRC and you believe your claim to be correct, you are asked to contact HMRC by telephone. An officer from HMRC is assigned to your case ready for when your CJRS investigation is progressed. It is anticipated that the processing system will not be available for some weeks. The inevitable delay between receiving the letter, being assigned a contact by HMRC and the subsequent processing will be additionally stressful for many people.
Should you believe that your claim is incorrect, you are asked to contact HMRC by email and then given instructions for providing a formal disclosure. However there is time to make a voluntary correction of earlier CJRS claims. Also, excess grants can be corrected without penalty within 90 days of receiving the grant or by 20 October 2020 (whichever is the later date).
Please remember to contact us if you receive a compliance letter from HMRC. We’re here to help.