As the Coronavirus Job Retention Scheme (CJRS) enters its final months, now is the time to review grants that you have claimed under the scheme, and pay back any amounts claimed in error. You may also choose to repay voluntarily funding that you have received under the scheme if your business does not need it. Some notable large companies in the retail and hospitality sectors have opted to do this.
The CJRS allows employers to claim grants to pay employees who are furloughed or flexibly furloughed. Under the scheme, the employee must be paid 80% of their usual pay for their unworked hours, subject to a cap of £2,500 a month or equivalent. The employer can claim some or all of this back from the Government under the CJRS. If the amount that you have claimed is less than the amount you need to pay the employee (as will be the case for July, August and September 2021), you must make up the shortfall.
If you have claimed too much or you want to make a voluntary repayment, you can either:
- correct the overpayment in your next claim; or
- get a payment reference from HMRC and repay the money within 30 days.
HMRC have published guidance which explains how to make a repayment.
Making a correction in your next claim
If you still have employees who are furloughed or flexibly furloughed and you will be making another claim under the CJRS, you can correct the overclaim when you do your next claim. If you have another claim to make, you should adjust that claim rather than making a repayment direct to HMRC.
To correct an overclaim, you should initially work out your next claim as usual. If you are sending a file containing your claim details, you should prepare this as normal without taking account of the amount overclaimed.
You will then need to work out the amount you have overclaimed, and deduct this from the amount that you are claiming this time. The result is the amount that you will need to enter in the ‘claim amount’ box on the claim form. You will also need to enter the amount that you have overclaimed in the ‘overclaim’ box. For example, if you are making a claim for July 2021 for £20,000 and you have realised that you overclaimed £2,000 for June 2021, you will need to enter ‘£18,000’ in the claim box. This is the net amount that you are claiming for July 2021 after adjusting for the overclaim. You will also need to enter ‘£2,000’ in the overclaim box.
Paying HMRC back
You should only make a payment direct to HMRC if you do not have further claims to make and are not able to repay the amount that you owe by adjusting a subsequent claim. Before making a payment, you will need to get a payment reference from the online service. It is important that you use the correct reference.
Payments can be made to the following HMRC account using faster payments, CHAPS or Bacs:
- sort code: 08 32 10;
- account number: 12001039;
- account name: HMRC Cumbernauld.
Payments can also be made by debit card or using a corporate credit card (but not a personal credit card).
If you have overclaimed, you must tell HMRC by the later of:
- 90 days after the date on which you received the money to which you were not entitled; and
- 90 days from the date on which you ceased to be eligible to keep the grant because your circumstances changed.
To avoid being charged a penalty, you will need to notify HMRC and repay the overclaimed grant within this time frame.
We can help
Get in touch to find out how we can help you sort out any mistakes you have made when claiming grants under the CJRS.