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How to make CJRS claim corrections

The Coronavirus Job Retention Scheme (CJRS) claims process now allows employers to declare over-claims of grants, and offset the excess grant claimed, or repay it to HMRC.

29th Jun 2020
Tax Writer Taxwriter Ltd
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CJRS Claims image updated

The lack of an error correction facility in the CJRS process has been the number one bugbear for tax agents and employers, who have sometimes struggled to calculate the correct amounts of employee costs to claim under the furlough scheme.

Over-claims

On 5 June HMRC added information to its guidance on how to work out the amount to claim through the coronavirus job retention scheme. This was quickly spotted by sharp-eyed AccountingWEB member PandoraSleeps.

Where the employer has over-claimed the CJRS grant in an earlier claim they must adjust the amount claimed in the current claim, to take account of the amount of over-claim, and tick a box to say a correction is being made.

Where the employer has already made it final CJRS claim, it must repay the over-claimed amount directly to HMRC. To do this the employer, or tax agent must first call HMRC coronavirus technical line: 080 0024 1222, and request a payment reference number, which will being with X. This must be used for the transaction reference when repaying HMRC, and the guidance indicates that this repayment can only be made electronically. 

Record keeping

The employer must keep the following records for six years:

  • amounts of the CJRS claims
  • claim period for each employee
  • calculations of grant and any corrections made
  • for CJRS v.2 the usual hours worked and the actual hours worked for each employee.

Similar HMRC guidance on the communication required with each employee about their furlough periods, says those records need to be  should be kept for at least five years.   

Under-claims

The online error correction facility only applies to over-claims of CJRS grants. If the employer has under-claimed the CJRS grant due they should not adjust the next CJRS claim.

To correct an earlier under-claim of the CJRS grant the employer should call HMRC on the coronavirus technical line: 080 0024 1222. The HMRC officer can put through a parallel claim for the extra grant due and provide a claims reference number.         

How much?

The HMRC factsheet about the new flexible furlough scheme states that around 40% of CJRS claims have not included employer NIC costs or employer pension contributions, which are both permitted as part of a claim.

The same factsheet said the average level of wages claimed under CJRS so far is £1,380 per month. This average monthly pay would generate an employer class 1 NIC liability of £89.42 and employer workplace pension contributions of £25.80, indicating an under-claim of £115.22 per employee per month using 2020/21 thresholds.

Where the employer has claimed the Employment Allowance (now £4,000 per year), any employer’s NIC covered by that allowance should be excluded from the CJRS claim.

Penalties are possible

The draft legislation, which brings the CJRS grant into the tax system to be taxed as income, also includes provisions that allow HMRC to claw back any coronavirus support payments which were not due.

Where directors do not notify HMRC of the over-claim of a CJRS grant, a penalty may be applied under the failure to notify rules, treating the error as deliberate and concealed. This would mean a penalty would be imposed at 30% to 100% of the overpayment if the employer voluntarily disclosed, or 50% to 100% of the overpayment where the disclosure was prompted by HMRC.   

HMRC is expected to take a light-touch approach to penalties, and not penalise for genuine errors.

Replies (11)

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By Ben McLintock
10th Jun 2020 10:42

The lack of ability to adjust for under claims is ridiculous. I have a claim where we overlooked £250 of employer contributions to an employee's private pension scheme in earlier months.

Most pragmatic position would've been to allow it to be added to the next claim, little as it is. Would a threshold of (say) £2,000 to allow for such adjustments be too much to ask?

The wording of the guidance changed a few times since late March, and people will inevitably notice errors here and there.

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Replying to Ben McLintock:
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By NYB
10th Jun 2020 12:33

Typical of HMRC to make it easy to repay. Not so easy to add on. There must have been thosands of incorrect claims when we were strggling with that first month of Furlough to include that least week in March. There can be no reason not to have it done in exactly the same way as repaying (is there). The whole telephone bsiness sounds convoluted so "can we bothered". Thats what they are banking on.

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By ASF
10th Jun 2020 12:45

Just had to declare over-payment in our claim submitted due to payroll provider error in April NIC, but the system did not want to let me put in a negative NIC figure, so I had to fudge the furlough salary payment box to get the overall total right, after the refund! Pretty sure HMRC may not like that, if they check it, but couldn't get it to work any other way......

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Morph
By kevinringer
10th Jun 2020 13:38

"The HMRC factsheet about the new flexible furlough scheme states that around 40% of CJRS claims have not included employer NIC costs...."

I'm not surprised: most will be covered by Employment Allowance. Are HMRC saying we should still claim even if covered by Employment Allowance?

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Replying to kevinringer:
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By NYB
10th Jun 2020 15:24

Turning it on its head many of the larger firms use up their 4K in the first month. Even one of my smaller ones has. So the 40% are presumably us micro businesses, correctly, not claiming

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Replying to kevinringer:
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By Judyabcs
10th Jun 2020 15:48

In April HMRC advised me to claim the Er NIC even though the employer would not be paying as it was covered by the Employment allowance, I asked the helpline again in May and was told not to claim. I have tried to correct but cannot enter a negative amount so I have kept a note of the over claim and will adjust as soon as the employer actually pays NIC - this is the only way I can see it will work as HMRC won't let you amend the wage claim to compensate for the error.

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Morph
By kevinringer
10th Jun 2020 13:40

"Where directors do not notify HMRC of the over-claim of a CJRS grant, a penalty may be applied..."

Does that mean the penalty only applies to limited company employers?

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By SteveHa
10th Jun 2020 15:02

I corrected as I went, and I challenge HMRC to successfully challenge my approach given the sanctions available to them for doing it wrong, and their lack of movement on guidance for correcting.

I'd happily see them at tribunal re this.

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Replying to SteveHa:
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By NYB
10th Jun 2020 15:25

Me too. I'll join you.

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By Carolinehaynes
10th Jun 2020 15:27

I made an error in week 52 (client failed to inform me they worked a week in hand) There was Employers NIC claimed in week 52 but do not had Ers NIC in the current week to adjust the error against and it won't accept a negative figure I was advised by HMRC not to adjust the total and the technical team are contacting me so it is still not great!

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By pauljohnston
16th Jun 2020 20:50

There will no doubt be errors. Should we make them for clients we will amend if allowed and if not make a phone call. In either case a letter will be sent to HMRC just in case its employees or computer system loose the note

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