Deadline looms for notification of furlough claim mistakes

Please Note: All information was correct at time of writing on 12 October 2020. We do our very best to make sure our information is as up to date as possible, but we’d encourage you to check out our latest articles and to check the government website for updates as they happen.

The period of grace HMRC gave to employers to notify them of errors made in furlough payment claims is due to come to an end on Tuesday 20 October (or within 90 days of receiving the overpayment/ceasing to be entitled to the overpayment – whichever is the later).

HMRC acknowledges that employers could have made genuine errors, particularly in the early days of the scheme when guidance was sketchy and claims needed to be rushed through to protect businesses and jobs from the effects of lockdown.

However, they also expect employers to check their claims and let them know if a mistake has been made. A failure to notify could result in penalties being imposed in the region of 30% to 100% of the amount overclaimed and, in the most serious instances, criminal prosecution.

 

What should employers do now?

  • If you haven’t done so before now, check your claims to ensure they’re correct. If you find an error, contact HMRC to report this before 20 October.  If you’re unable to repay this immediately, discuss with them your proposals for repayment.
  • Ensure that you’ve retained all the records necessary to show that your furlough claim was valid, namely:
    • the employee’s agreement to be furloughed/flexibly furloughed
    • the amount claimed and claim period for each employee
    • the claim reference number for your records
    • your calculations in case HMRC need more information about your claim
    • for employees you flexibly furloughed, their usual hours worked including any calculations that were required to reach this figure
    • for employees you flexibly furloughed, the actual hours worked
  • These records should be retained for 6 years.

The government estimates that as much as £3.5 billion has been paid out in fraudulent or incorrect claims and HMRC are currently investigating 27,000 high-risk claims, 10,000 of which they hope to have investigated by the end of the year.

 

Citation can help at every step of the way

These are challenging times, especially for employees, business owners and employers. Our team of HR and Employment Law experts provide you with the latest government news to help you work through this difficult period.

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