Changes to employer coronavirus furlough claims
As of 1st September the government has enforced a new ruling in relation to application of furlough claims.
In general, employers will still need to provide the employee with the minimum 80% of their specified salary be it on Full or Flexible Furlough conditions.
However the government will now only make payment for 70% of this claim, to a maximum cap of £2,187.50. The remaining 10% must be topped up at the cost to the employer, meaning that the employee still receives their entitled 80%.
If employers wish to top up the employee’s salary further this can still been done, but again this will be at the cost to the employer.
Also note that as of 1st August 2020 the employer is no longer able to claim the Employer NI or Employer Pensions Contributions within the Furlough claim, these too will be at the cost to the employer.
It has now been reported that HMRC are currently investigating over 27,000 furlough claims that may have been wrong or fraudulent.
HMRC have also extended the period of time in which employers can correct errors and amend claims under the Coronavirus Job Retention Scheme (CJRS) to the later of:
- 90 days after the day the finance act was passed (22 July 2020) or
- 90 days after the tax on the payment becomes chargeable.
This has been increased from 30 days previously.
If the employer is still making CJRS claims, HMRC could be notified on the submission. There is a box to mark where you can notify HMRC that you are adjusting the current claim to take into account a previous overclaim. If the employer has already made its final CJRS, there is a HMRC coronavirus technical helpline to call which is 080 0024 1222.
If the employer has made an underclaim, there is not the facility to make this correction on the next claim. The employer will need to contact HMRC’s coronavirus technical helpline.
Where employers do not notify HMRC of the over-claim of a CJRS grant, a penalty may be applied under the failure to notify rules. HMRC will be treating the error as deliberate and concealed. This would mean a penalty would be imposed, as follows:
- 30% to 100% of the overpayment if the employer voluntarily disclosed, or
- 50% to 100% of the overpayment where the disclosure was prompted by HMRC.
HMRC is expected to take a light-touch approach to penalties, and not penalise for genuine errors.