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Clock is ticking to repay coronavirus grants

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. 

28th Jul 2020
Tax Writer Taxwriter Ltd
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Repayment
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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.

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Replies (5)

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By paulwakefield1
29th Jul 2020 09:25

Since any failure to repay results in the overpayment being recovered by a tax assessment, does this mean the original receipt remains taxable as I assume the assessment is not tax allowable? If so, and couple that with a failure to notify penalty, it could be quite eye watering!

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Replying to paulwakefield1:
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By Paul Crowley
29th Jul 2020 09:47

That would appear to be the case. Need legislative change to correct. Was this the intension of Parliament? Latter sentance generally used to punish, not relieve.

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By Jeh1
29th Jul 2020 13:27

If a client already refunded the SEISS money - exact sum - into his Self Assessement account as there were no HMRC details for refunding at that time, how can he get the refund transferred from his Self Assessment account and into HMRC SES Refunds dedicated bank account?

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By unclejoe
29th Jul 2020 23:00

Some people have complicated self-employments, and are also on low incomes. How do you determine whether your trade has been affected by COVID, and if so how much? How can you be sure that HMRC would determine this the same way? What happens if you have an intention to continue to trade, but end up not actually doing so. How will HMRC assess that intention?
Consider this scenario. A has income from three sources. She is a musician and plays in a band, she is a qualified carer for the disabled and elderly, and from time to time she does odd days casual work in a warehouse. The band have had no bookings since March, and there is no prospect of bookings for the foreseeable future. Other band members have said that they are not sure if they want the band to continue. A has no other musician work, but would gladly join another band if the opportunity arises – does this count as continuing?. She does care work on a part-time employed basis, but also has one client that she looks after one night a week as relief for the family as self-employed. In march the family have decided to reduce the number of people giving grandma care because of COVID and it now seems likely that when the situation is safe grandma will go to a care home, so this is unlikely to resume. The warehouse work was sporadic and unlikely to resume for the foreseeable future as they have already furloughed full-time staff. And there are rumours that the warehouse may permanently close.
A has correctly and honestly accounted for tax on all her income, but has not had income above the personal allowance threshold. She claimed and was awarded nearly £1,000 SEISS which was a lifeline. She is dyspraxic and finds record keeping and personal organisation a challenge, so records are basic. She struggles with her finances and regularly uses foodbanks and raids supermarket skips late at night for food. She has not read this article, but if she did and realised that HMRC may come demanding the £1,000 back with another £1,000 penalty I think it would tip her over the edge.
Accountants won’t see people like this. Those on the edge can’t afford accountants services. But they exist and are suffering. Thank you.

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By AndrewV12
04th Aug 2020 11:56

Mmmm when we all look back at the furlough grants in 5 years time, would they be seen as over generous, about right or under generous, I suppose the question is what state would the country be in if they had been created and paid out. I have a feeling certain individuals who ticked all the boxes have made a million pounds plus, did they need that much money for businesses which potentially were going no where.

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