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furlough errors

Client submitted his own furlough claims

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So we are doing our client's accounts to 31 Dec 2020 and he has filed his own furlough claims during the year.  Sigh.  I did send them all instructions about what they could claim, but he seems to have got carried away. And yes, it would have been lovely if we could have done everyones' claims for them, but they did not all want to pay us for this.  For a one man company it really should have been simple...

He has claimed for pension contributions although he is not auto enrolled - am I right in thinking he can't have any pension contributions because it was not an ae scheme - he is on the usual small salary as a director but company contributes £500 per month to a pension as an employer contribution and has been claiming 80% of this in the first few months of furlough!

He has also claimed ers NI although there was none

And furlough for all of March 2020 even though he has given us a detailed mileage claim for March - for the whole of March...

We will have words and will be filing an amendment!!  but do you think he can claim any pension at all (it would be very small, but I could calculate the 3% figure that would have been payable under ae) given that it is not an AE scheme (and he does not need to have one as he is a sole director on the payroll)

Thanks

Replies (9)

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By GHarr497688
14th Sep 2021 09:09

Your not his keeper however HMRC are so let them do the work.

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Replying to GHarr497688:
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By snickersinatwix
14th Sep 2021 09:22

I am not his keeper, indeed, but I have to file a corporation tax return stating what furlough has been claimed and what furlough should have been claimed. If I use his figures knowing they are wrong then that does not leave me in a good place.

Also, I am not prepared to turn a blind eye to the fact that he has claimed several £000 more than he should have done.

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Replying to GHarr497688:
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By Tax Dragon
14th Sep 2021 09:29

You haven't grasped self assessment at all, have you?

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Replying to GHarr497688:
By Duggimon
17th Sep 2021 10:00

GHarr497688 wrote:

Your not his keeper however HMRC are so let them do the work.

Just to be clear, you are advising the OP to file accounts and a tax return that he knows are wrong. That is your advice. To go ahead and file incorrect accounts and tax returns on behalf of his client in order to gain a financial advantage, assisting his client in defrauding the government and by extension the taxpaying public by claiming grants he wasn't entitled to. That is your advice to the OP here, not to make any effort in correcting the errors he has already uncovered but to knowingly assist in covering them up.

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By Hugo Fair
14th Sep 2021 13:47

You mention a number of 'issues' ... ranging from facts to (likely accurate) suspicion.

1. "He has also claimed ers NI although there was none" ... I'm stunned as to how he did actually manage to calculate the values?!?
2. "furlough for all of March 2020 even though he has given us a detailed mileage claim for March - for the whole of March" ... again almost speechless, but have you asked him to explain/justify?
3. "company contributes £500 per month to a pension as an employer contribution and has been claiming 80% of this in the first few months of furlough" ... is patently not within the 'rules' (although it's difficult to track them down as GOV.UK simply overwrites guidance with updates making version control nigh impossible).

Aside of the (unhelpful) observation that this is what happens when you let clients submit their own figures unchecked by you ... so woebetide MTD for IT ... that leaves your core question: "do you think he can claim any pension at all (it would be very small, but I could calculate the 3% figure that would have been payable under ae) given that it is not an AE scheme (and he does not need to have one as he is a sole director on the payroll)"?

Not 'needing' to have an AE scheme is irrelevant ... but does the CJRS claim process allow a non-AE scheme to be included - and if so at what capped amount?

https://assets.publishing.service.gov.uk/government/uploads/system/uploa... shows the Further Treasury Direction made on 25/Jun/2020 ... and this topic is covered in sections 34.1 to 34.5
My interpretation is that the a claim is allowed if it is a "registered scheme" (which I don't believe applies exclusively to AE schemes) - but that the maximum amount claimed is 3% of the "gross amount of earnings falling for reimbursement in respect of the CJRS claim period".

So from what I've understood of your client's scenario ... Yes he could claim pension contribs, but capped at 3% of zero earnings!

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RLI
By lionofludesch
14th Sep 2021 16:41

I was never in the position of folk paying more than the legal minimum but I think you could claim 3% if otherwise eligible. Whether 3% of not a lot for four months would be worth your while to check on the rules is probably the more pertinent question.

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Replying to lionofludesch:
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By the_drookit_dug
14th Sep 2021 19:05

Agreed. The treasury direction states that contributions must be to a registered pension scheme - doesn't say it has to be an AE scheme.

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By john hextall
17th Sep 2021 10:20

From memory of the dim and distant early days of furlough claims, you could not claim pension contributions made by the company as in a salary sacrifice scheme. Therefore I'm guessing he uplifted his pay of <£1000 by the pension contribution of £500 a month in order to get the furlough payment. Is this what he has done? I don't see a problem with that (unless there have been contradictory RTI submissions) other than he will have to pay more tax and NI than he was intending to.

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Replying to john hextall:
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By Hugo Fair
17th Sep 2021 12:36

"Therefore I'm guessing he uplifted his pay of <£1000 by the pension contribution of £500 a month in order to get the furlough payment .. I don't see a problem with that"
That's a different scenario to anything set out in OP - but anyway you should see a problem with it. CJRS claims based on 'earnings' were not related to some belated increase in salary but to the salary at specific points in time in the past.

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