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Clock is ticking to repay coronavirus grant


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.


Notification period


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.




If the taxpayer does not repay HMRC the amount of coronavirus support payment overclaimed, HMRC will raise an assessment of tax equals the overclaim (FA 2020, Sch 16 para 8). This assessment can be appealed.


Where the taxpayer fails to notify HMRC of the overclaimed coronavirus support payment within the 90-day period HMRC will impose a penalty under the failure to notify rules. The penalty is calculated at 30% to 100% of the overclaimed amount, for an unprompted disclosure, but will be set at 50% to 100% of the overclaimed amount for a prompted disclosure.


Thus, a taxpayer who is investigated by HMRC and is found to have incorrectly claimed a CJRS or SEISS grant will be required to repay 150% to 200% of those funds.




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