Self-employed individuals, and employers, have 90 days to inform HMRC that they have over-claimed the SEISS or CJRS grants and repay any excess before penalties apply.
Any incorrect CJRS grant claims in which the employer has overclaimed the amount due can be corrected in a later CJRS claim. If the employer has submitted their final CJRS claim there is a facility to repay HMRC online which has been in place since 26 June.
If the employer has under-claimed the CJRS grant, the extra amount of grant due needs to be set-up directly by HMRC, and the employer should not adjust the amount claimed in a later CJRS claim.
A CJRS grant should be repaid to HMRC if the funds were not used within a reasonable period to reimburse the employer’s costs relating to furloughed employees, such as furloughed wages, employer’s class 1 NIC and employer’s contribution to a workplace pension.
When the draft legislation was proposed for taxing the coronavirus support payments (SEISS, CJRS and SSP reclaims), it included a 30-day period for taxpayers to notify HMRC of corrections needed to any of those claims. After significantly lobbying by the professional bodies, this notification period was extended to 90 days (FA 2020, Sch 16, para 12).
If the taxpayer notifies HMRC by the 90th day after the claim was submitted, or for claims submitted before 22 July 2020, by the 90th day after FA 2020 was passed, no penalty will be imposed. This gives taxpayers until 20 October 2020 to come clean about any overclaims of SEISS, CJRS or SSP.