Last week, HMRC released some short but key updates. One was in relation to how to correct errors in Coronavirus Job Retention Scheme (CJRS) claims. The other was detailing how the recently announced Job Retention Bonus for employers will work.
Here, our experts have summarised these key updates that every employer needs to know.
HMRC have issued a short guide on how to correct errors in a CJRS claim. They cover two scenarios:
If an employer wants to delete a claim online, they must do this within 72 hours. If they want to report an error which means they have claimed too much, they can either:
In these circumstances, the employer will have to contact HMRC as they may need to carry out additional checks.
The Finance Act 2020, which became law last month, provides HMRC with extensive powers to take enforcement action against those who have abused the CJRS. The starting point for penalties will be 100% of the sums incorrectly claimed. This can be reduced if the employer is fully co-operative and repays the overpayment as quickly as possible but it cannot fall below 30% and will not be reduced below 50% if HMRC had already started their enquiries at the time action to rectify was taken. Company officers can be held jointly and severally liable where a company is insolvent. HMRC also has powers to publish details of deliberate defaulters and have warned that they will consider criminal proceedings in cases where they believe there has been a deliberate misuse of the scheme.
On Friday 31 July, HMRC published more information on the Job Retention Bonus. Further details will be published in September, but here is what we know so far about the scheme.
The Job Retention Bonus (JRB) is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the CJRS, and who remains continuously employed up until 31 January 2021, earning at least £520 a month on average between 1 November 2020 and 31 January 2021.
All types of employers are eligible to claim the JRB including recruitment agencies and umbrella companies. To be eligible, the employer must have:
To be eligible, the employee must have been:
Detailed rules will be published on this in September. The guidance states that only earnings recorded through HMRC Real Time Information (RTI) records can count towards this.
If employees in the above categories returned after 19 June 2020 and were claimed for under the CJRS, they will also be eligible for the purposes of making a JRB claim. The exception in the CJRS rules refers to ‘parental leave’ when in fact they mean wider statutory family-related leave such as maternity, shared parental, adoption, paternity, and parental bereavement leave. This would also apply here.
Fixed-term contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.
The new employer may be able to claim the JRB in respect of these employees if they have been furloughed and successfully claimed for under the CJRS by the new employer (this will also be the case where TUPE would have applied had it not been for the liquidation of the transferring company). JRB cannot be claimed where the transfer occurred after 31 October.
Employers will be able to claim the JRB after they have filed PAYE for January. More details on the process will be published in September.
Payment will be made to employers from February 2021.
Yes, employers must include the whole amount as income when calculating their taxable profits for Corporation Tax or Self-Assessment.
Employers must make sure their employee records are up to date and accurately reported through the RTI system. They should also ensure their CJRS claims are correct and, where necessary, any changes have been notified to HMRC.
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