HM Revenue And Customs Sign
The Revenue is auditing claims made under the CJRS initiative

Deadline looms for industry to admit furlough errors

Sarah Townsend

Real estate and hospitality firms have been urged to come forward by tomorrow if they believe they made a mistake when applying for support from the Government’s Coronavirus Job Retention Scheme.

“The self-reporting timeframe is short but is the best way to avoid escalating the problem and risk,” said Mike Herdman, director of employer tax solutions at professional services firm Grant Thornton, who is leading the firm’s CJRS review team in the North West.

“Eligibility is one of the big questions,” he said in a statement to media. “If a company’s financial performance improved throughout the Covid-19 pandemic, it may be more difficult to evidence that coronavirus was the reason for furloughing.”

More than 453,700 North West job roles were furloughed during the pandemic as of 31 July, according to official statistics. Nationally, real estate companies represented 18% of the take-up, or 76,800 jobs, and construction – a separate category – accounted for another 22% of the claims, totalling 277,000 roles.

The accommodation and food sector represented 44% of the take-up, or 942,300 jobs.

HM Revenue & Customs is now reviewing and auditing companies’ applications to identify erroneous or fraudulent claims, ahead of the official termination of the scheme on 31 October.

For example, if a company’s financial performance was not adversely affected during the Covid-19 lockdown period yet it applied for a grant under the furlough scheme to help pay employees’ salaries, then questions may be asked, according to Herdman.

The Government may also check the level of claims made. “The initial guidance came out shortly after the announcement [of the furlough scheme] on 20 March, but was then updated several times,” he said.  “So, companies worked out their own version of how calculations should be done, based on the initial announcements.

“That might not necessarily have been correct once the guidance was updated. We’ve seen numerous examples of unintentional mistakes resulting in either over-claiming, or under-claiming.”

HMRC has already issued more than 30,000 letters nationwide as part of the probe and there is a deadline of Tuesday 20 October for companies to come forward if they fear they made a mistake and offer to repay the grants if need be.

However, HMRC has said it will pursue criminal investigations of any companies found to have misused the scheme.

 

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