On 28 July 2020, HMRC published two new guidance notes setting out how they plan to deal with inaccurate CJRS claims. There is a new 'errors' guide, setting out how to correct a mistake once discovered, and a separate 'penalties' guide, setting out the penalties HMRC may impose where the Scheme is misused.
The errors guide sets out what employers need to do if they have claimed too much or too little from the Scheme in error.
Where an employer has claimed too much this should be rectified in their next claim. If no further claims will be submitted, employers should contact HMRC to arrange repayment. The final deadline for notifying HMRC of an overclaim is 20 October 2020 and failure to notify by the deadline may result in penalties.
Where employers have claimed too little, they must still make the correct payments to employees. Employers will need to contact HMRC to amend their claim and HMRC may wish to carry out additional checks before increasing the amount of the grant. However, employers are no longer able to amend claims for the period up to 30 June 2020.
As of 29 May 2020, HMRC had received 1,868 complaints of fraudulent use of the Scheme. The penalties guide confirms where an overclaim was deliberate, HMRC may recover the whole amount of any overpayment through an income tax charge with interest and penalties of up to 100% of the overpayment. HMRC will take into account whether employers knew that they were not entitled to the grant or had stopped being entitled to it when deciding the amount of a penalty. HMRC may also publish the names of employers who have deliberately misused the Scheme. Penalties will not be charged if the employer was initially unaware that they had been overpaid a grant and then repaid it within the relevant deadline.
The HMRC guidance does not address potential criminal sanctions for abuse of the Scheme. However, HMRC has powers to investigate alleged fraud, including to search an individual's home and business premises under warrant, and to seize computers and freeze bank accounts relating to a business. Where HMRC has investigated a suspected fraud, they may make a charging recommendation to the Crown Prosecution Service.