COMPLIANCE
All you need to know about coronavirus job retention scheme compliance
Susan Ball, tax partner at RSM Employer Solutions and president of the Chartered Institute of Taxation, Carolyn Brown, employment law partner and head of client legal services, RSM UK and Paul Marcroft, tax director, RSM UK, discuss compliance activity surrounding the coronavirus job retention scheme (CJRS) now it’s closed, and how you can prepare O n 20 March 2020, then chancellor of the Exchequer, Rishi Sunak, delivered a speech that would over the following 18 months, through its taxpayer protection taskforce (TPT). The TPT has 1,250 dedicated staff in place until March 2023 to concentrate specifically on this. Up until the end of March 2022,
correct, with any overclaimed CJRS grant amounts returned directly to HMRC or reported on their tax returns. The TPT will look to payroll teams to understand how businesses remained compliant with the complex guidelines and legislation surrounding CJRS. What action is HMRC taking? HMRC has been undertaking several compliance intervention activities, including investigating reports to its hotline, issuing ‘one-to-many’ nudge letters and commencing one-to-one compliance reviews, focused on three areas of concern, namely: ● errors – genuine mistakes in legitimate claims and calculations ● opportunistic actions – any artificially inflated claims ● organised crime – fictitious claims or hijacking of legitimate claims. CJRS grants must be reported on employer tax returns and HMRC will risk assess these to decide whether to enquire into them. For corporation tax returns filed by the normal due date, it has the following time scales in which to open a compliance check: ● 12 months from the actual filing date for small companies (or companies that are members of a small group), or ● 12 months from the normal due date for other companies For late or amended returns, it has 12 months from the specified quarter day
continue to have implications for payroll professionals for several years to come, when announcing the introduction of the CJRS. The words, “For the first time in our history, the government is going to step in and help to pay people’s wages”, rang profoundly in the ears of the profession. You, the payroll professionals enabled employers to claim and calculate CJRS grants and were the ‘unsung heroes of the hour’. In fact, it took a national emergency for the profession to be recognised as business critical, in March 2020, when the Department for Education confirmed you were key workers. You had an undeniable impact on the job security and welfare of staff, as well as the continuation and bottom line of many businesses. The CJRS provided grants to employers between March 2020 to September 2021, so they could retain and continue to pay staff during the pandemic, by furloughing employees at up to 80% of their wages. CJRS has, of course, come with some drawbacks:11.7 million employees were furloughed through the scheme, at a cost to UK taxpayers of £70 billion. Her Majesty’s Revenue And Customs (HMRC) chief, Jim Harra, stated in November 2021, that HMRC expected to recoup around £2.3 billion of overclaimed CJRS and other coronavirus grant monies
HMRC opened nearly 41,000 one-to-one compliance interventions and contacted over 63,000 people via one-to-many campaigns. In a letter from Mr Harra to the chair of the House of Commons Public Accounts Committee in April 2022, he confirmed the TPT expects to recover up to £1 billion in overclaimed coronavirus grants during 2021/22 and 2022/23. In July 2022, HMRC confirmed, since the start of the schemes, it had prevented more than £775 million from being lost through error and fraud in the various coronavirus financial support schemes. This was done through compliance activity or by recovering overclaimed grants. With the total amount of money either blocked from being paid out or recovered through its compliance work sitting at more than £1.2 billion, HMRC compliance activity is still ongoing. In addition to this figure, employers and other grant claimants have made unprompted decisions to repay £970 million, either because they decided they no longer needed the money claimed, or because they recognised an error and returned it. It’s clear HMRC expects employers to review their claims to ensure they’re
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 14
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