HMRC produces Q&A style CJRS common errors guidance sheet
By Justine Riccomini, Head of Tax (Employment and Devolved taxes)
26 August 2022
Justine Riccomini explains the new ‘CJRS Common Errors Q&A Guidance’ sheet
The CJRS Forum was set up around a year ago with the intention of finalizing the scheme, ironing out any kinks and problems experienced by stakeholders with operating the system and making sure claims are tallied properly. ICAS has been a member of the Forum since its inception.
Many debates have ensued in the intervening period, not least with the issue of offsetting underclaims and overclaims, to try to make life easier for everyone involved.
The Forum has just succeeded in getting HMRC to publish a much-needed Q&A style guidance sheet to explain some of the most common errors and how to resolve them.
The guidance is eight pages long and covers all the most commonly raised areas of confusion for employers where it is possible errors could have been made. It is likely that most employers will find that the errors they have made will be covered by the guidance, as it has been created with input from the main professional and representative bodies who have collectively brought the issues to HMRC’s attention.
The areas of query covered are:
- How does an employer disclose an error to HMRC?
- Does HMRC expect claims not calculated in line with the HMRC Direction and guidance to be corrected and the amounts repaid?
- If an employer has acted on incorrect HMRC advice do they have to make a correction?
- If a different method has been used to HMRCs preferred method for calculating reference pay but it is consistent with guidance, does it need correcting?
- When do NICs overclaims need to be corrected?
- If a different method has been used to HMRC’s preferred method for calculating the unworked hours in the claim period but it is consistent with guidance, does it need correcting?
- What will HMRC accept for calculating the lookback period for reference pay?
- What if an employer has not used the higher of the average pay and lookback methodology, for variably paid employees?
- Do calculations need correcting if employer has used the fixed pay method for employees with elements of variable pay where they considered this best represented how they were paid?
- If employer claimed 80% of reference pay after the taper was introduced is a recalculation required?
- If the value of benefits in kind provided via salary have been included in calculation of reference pay, does this need to be corrected?
- My employees were furloughed as they could no longer work at my premises because of the effect of COIVID-19. Do I have to show HMRC there was a financial impact on my business?
- If HMRC identifies an error during an enquiry does it need correcting?
- If there is no written furlough agreement before a claim is made, is the claim still valid?
It is important that anyone involved in the processing of payrolls and making CJRS claims sees this guidance. HMRC has, however, decided not to publish it on GOV.UK.