Fraud teams are currently requesting information from firms who participated in the scheme to ensure claims were correct and all conditions met, says Brian Robb, payroll manager at Anderson Anderson & Brown

The Herald:

The Coronavirus Job Retention Scheme (CJRS) began in March 2020 and was a lifeline to many businesses. Due to the impact of the pandemic, and how quickly it took hold, a quick response by government to support businesses was the focus. 

This meant that HMRC issued funds through the CJRS with the confirmation that compliance checks would be carried out in the future, rather than completing checks in the moment. 

Since then, there have been numerous changes to the CJRS, each with a new set of rules and regulations to follow. 

The CJRS continued to be a lifeline during 2020 and 2021, but the compliance requirements became increasingly complex, with employers having to ensure that they were correctly claiming CJRS when the regulations were amended.  

In March 2021, Chancellor Rishi Sunak announced the launch of a COVID fraud team within HMRC. HMRC estimates that up to 10 per cent of furlough cash may have been claimed fraudulently – a sum now equal to more than £5 billion. 

The fraud team is responsible for carrying out the compliance checks promised last year and they are now underway. 

Through these checks, HMRC is requesting a vast amount of information which will date back to when businesses first submitted a CJRS claim to confirm compliance. 

These checks are there to make sure that businesses have met the conditions of receiving the grants and have claimed the correct amounts. 

HMRC has been submitting ‘nudge’ letters to companies to ensure that they have used the scheme compliantly. A ‘nudge’ letter does not mean that the scheme has been operated incorrectly. It allows the companies to review their records to ensure that, to the best of their knowledge and belief, the scheme has been operated correctly. 

It will identify one of three outcomes: a requirement to make a disclosure to HMRC, or the records are in order and a disclosure is not required, or complete inaction by the taxpayer. 

There have been various versions of CJRS and employers must ensure that they have claimed correctly during each change in the CJRS claim process.  

The compliance checks that are issued from HMRC regarding CJRS come with extensive information requests with a very tight timescale of two weeks from the date of the letter to provide the information. 

At Anderson Anderson & Brown, our experience has shown that HMRC has been supportive in extending the date but only on the first instance and only for a short time. Firms should pre-empt these requests and ensure that they have sound systems in place to store data and records ready to pass to HMRC. 

Requests are substantial and are on a per-employee basis. This means that the greater the number of employees placed in the scheme, the more information you will be required to provide. 

The information will be requested on a per wage payment. This means that employers paying weekly will be required to provide far more data than employers who pay monthly. 

Employers should act now and ensure their records are correct and complete. 

The typical information requested by HMRC includes:  

  • Employee’s name, address and NI Number 
  • Furlough start and end date 
  • Details of how their normal pay is calculated 
  • How their furlough pay was calculated 
  • Whether you paid the employee at least the amount on the claim (evidence is requested for this) 
  • The amount paid in pension costs (evidence is requested for this) 
  • Number of hours usually worked 
  • Number of hours worked 
  • Number of hours on furlough 
  • Employer NI Contribution claimed 
  • Employer Pension contribution claimed 

We recommend you review your records and CJRS claim(s) and contact HMRC once complete. If employers think the CJRS claim was correct, they are asked to contact HMRC by telephone. 

Should employers find their CJRS claim was incorrect, they are asked to reply by email. HMRC will then provide details on how to make a formal disclosure.  

Due to the value of fraud that has already been identified and reported, it is prudent for employers to carry out their own checks so they are complete and ready if any future enquires from HMRC arrive. 

Although the CJRS is due to cease in September 2021, HMRC’s checks will increase to ensure that all employers have complied. 

Acting now will save you time and money in the future, and give you peace of mind in the present.