Coronavirus Job Retention Scheme FAQs
This FAQ will provide a high-level assessment of the key aspects to help manage furlough, CJRS, and HMRC compliance during the Covid-19 pandemic.
CJRS has been used to help protect over 11.5m jobs with c.£61bn paid out to date. Given this, there is a need for the Government to ensure this total has been claimed fairly. Therefore, HMRC is now turning its attention to compliance, with a particular focus on “furlough fraud” and identifying where UK businesses have abused the original spirit and reason for CJRS being made available.
HMRC will be particularly interested in those that have abused CJRS and taken advantage of workers by claiming CJRS grants even though they may still be working. Indeed, HMRC has been sending “nudge” letters to employers to start investigating these matters.
However, all employers who have used CJRS should take stock and review what they have historically claimed as the scheme winds down with an expected end date of 30 September 2021.
Making genuine technical errors will not see HMRC throw the book at organisations (this will be reserved for the most serious offenders), but it will be important to identify these technical errors and pay back amounts overclaimed to reduce the risk of penalties.
To help, we set out below ten key areas where overclaims may have arisen:
1. No documented furlough agreement in place with the employee |
2. Incorrect pay elements used to calculate CJRS claim |
3. Employee paid less than the CJRS grant received |
4. The interaction with salary sacrifice both in calculating qualifying furlough pay and in making sure pay during furlough (after salary sacrifice) is at least equal to the CJRS grant received |
5. Zero-hour workers and calculating average pay |
6. Making a claim for pension and National Insurance Contributions (NIC) when there has been no actual payment made by the employer for these elements (e.g. not in a pension scheme, aged under 21) |
7. Calculating usual and furloughed hours for those who have been on Flexible Furlough |
8. Making sure claims remain valid when considering interaction with holiday (e.g Christmas shutdown week) |
9. Understanding what pay elements and pay periods to include when calculating the CJRS claim for variable pay workers |
10. How employers can demonstrate that their employees did no work whilst they were on furlough |
There are other areas of difficulty too, but we see these less frequently.
We offer a range of services to assist and support business with their CJRS compliance and governance, including:
Please do get in touch to discuss the CJRS/furlough support you would like to consider further by clicking the button below.
Additionally, as CJRS comes to a close, we can also support your business by helping you:
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