Payroll
circumstances. It does not specify if this would apply to a ‘section 151 officer’ in a local authority, but it is safer to assume that this will be the case. Those circumstances are where the officer is culpable for making a deliberate CJRS claim to which the employer was not entitled. These powers apply where HMRC can meet certain tests showing there is a serious risk that the employer will be unable pay the income tax assessment. So where does this leave public bodies? Clearly, we would not expect any public sector employers to be making fraudulent claims. However, HMRC may wish to review the position closely to satisfy itself that any claims in this sector meet the necessary requirements based ...claims can also be quite complex where employees are being flexibly furloughed and/ or their wages are subject to top-up.
the claimed CJRS payment deliberately is not used for the costs it was intended to reimburse. As mentioned above, employers are required to notify HMRC of any errors, and so the penalties apply if the person fails to notify HMRC within ninety days. The penalties could be of a fixed amount, although it is more likely that they will be based on the level of the overclaim and will be influenced by the employer’s behaviour and whether the employer has been careless or has deliberately made false claims. Interest charges are also likely to arise. It is worthwhile remembering that employers are required to keep a detailed copy of all records relating to CJRS claims for six years. This will allow HMRC a significant period of time to review claims and to penalise employers where errors are discovered. Finally, the measures give HMRC powers to make a ‘company officer’ jointly and severally liable for the income tax charge raised in relation to any CJRS payment to which the employer was not entitled or any CJRS payment which was never intended to be used to pay furloughed employee costs in certain
on its own (limited) guidance. Simple errors are also entirely possible regarding the basis of the calculation for the CJRS claims for certain employees, e.g. interpreting the complex rules where the employee’s pay is variable. On the latter point it is reassuring to note that HMRC has confirmed that it will not decline to make or seek repayment of CJRS grants based solely on the choice of calculation, providing a reasonable choice is made, in line with the most up to date guidance. CJRS claims can also be quite complex where employees are being flexibly furloughed and/or their wages are subject to top-up. Therefore, it is possible that mistakes have been made that will be picked up by HMRC. In summary, public bodies making CJRS claims should be aware of the potential implications of making incorrect claims and should take care to ensure that they can demonstrate that they have made a reasonable interpretation of the rules and applied the correct calculation methodology. As always, employers are urged to seek advice, where appropriate. n
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| Professional in Payroll, Pensions and Reward |
Issue 63 | September 2020
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