If you have underclaimed furlough pay for employees this can be corrected by amending the CJRS claim within 28 days of the end of the calendar month the claim relates to, so by 28 October 2021 for September 2021 claims.
What if the employer used the wrong reference pay to calculate the claim, and has underclaimed for earlier months? In most situations you are too late to amend the CJRS claim, but if the employer has also over-claimed furlough pay for a particular month it may be possible to set-off the over and under claimed amounts.
HMRC has just agreed with the professional accountancy bodies that off-sets are possible, and has updated its guidance on this point. In summary the correction of CJRS over and under claims must be made as follows:
- An under-claimed amount needs to be actioned as an amendment an existing claim within 28 days of the month it relates to.
- Over-claimed amounts need to be repaid to HMRC within 90 days of receiving the funds to avoid a penalty being imposed.
- Set-off of under-claims against over-claims is only possible within the same claims period – ie the same calendar month.
It appears from the new guidance that if the under-claim exceeds the amount of over-claim for the month, then the excess cannot be claimed from HMRC.
Where the employer has under-claimed for furlough pay, he must ensure that the correct amount is paid to the employee. If the employee doesn’t receive the correct amount of pay the entire CJRS claim for that employee for that month could be invalidated, and the employer will have more to repay to HMRC.
HMRC are now actively pursuing fraudulent CJRS claims.
Written by the Tax Advice Network