Furlough Scheme Amnesty
The Finance Act 2020 received Royal Assent on 22 July 2020. This among other things, started the 90 day clock running for employers to conduct a furlough scheme audit and report erroneous claims to HMRC. The coronavirus job retention scheme (CJRS) has been credited with assisting businesses at the height of a very stressful decision making time - but it is also recognised that errors may have occurred, deliberately and otherwise, by employers accessing the scheme and making claims.
Employers and businesses have been granted a 90 day amnesty period in which after having carried out their audit and found errors, employers have a chance to simply repay claims made in error at the height of the crisis. If this is done, employers will then not face any penalty.
The penalties for erroneous CJRS claims are severe, but not all will be dealt with by arrests and dawn raids.The first arrests for furlough fraud were announced by HMRC in July but these are only likely to apply to cases of “deliberate and concealed” non-compliance considering fraud charges.
In the vast majority of cases, where CJRS was not properly due, penalties applied by HMRC will be clawed back by imposing income tax rates of 100%. Employers should note that this does not have to have been deliberate abuse of the scheme, so all furlough claims should be audited, as HMRC can also reclaim money where there has been genuine errors leading to non-compliance.
Posted on 08/06/2020 by Ortolan
