As the Government announced it as extending the Coronavirus Job Retention Scheme (CJSR), it has also released further guidance on furlough fraud and the penalties that may be due if you do not notify HMRC of any overpayment of grants ...
Furlough fraud can happen in a number of ways. It's mostly about an employer claiming money it was not entitled to, or a change in the employee roster that wasn't accounted for during a CJRS claim.
The penalties are there for what HMRC considers deliberate behaviour although non-notification of non-deliberate overclaims will also incur a penalty if the employer does not notify HMRC in time.
For non-deliberate, unprompted behaviours:
- HMRC is notified within 12 months of tax being due = 0% to 30% of the 'potential lost revenue' (PLR – the amount that is unpaid as a result failing to notify)
- HMRC is notified 12 months or more after-tax was due = 10% to 30% of the PLR
For non-deliberate, prompted behaviours:
- HMRC is notified within 12 months of tax being due = 10% to 30% of the PLR
- HMRC is notified 12 months or more after-tax was due = 20% to 30% of the PLR
For deliberate behaviours:
- Where the notification was unprompted = 20% to 70% of the PLR
- Where the notification was prompted = 35% to 70% of the PLR
For deliberate and concealed behaviours:
- Where the notification was unprompted = 30% to 100%
- Where the notification was prompted = 50% to 100%
The Government emphasises that overclaimed grants must be repaid and this can be done during the next furlough claim or by making a repayment to HMRC directly.
By repaying during the next claim, HMRC will deduct that amount of the overclaim from the current claim payment. You should keep a detailed record of any CJRS claims for the next six years to prove any enquiries from HMRC regarding furlough fraud issues.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.