HMRC have started the next phase of compliance activity on the Coronavirus Job Retention Scheme (CJRS). It has written to around 3,000 employers it believes may have been overpaid. A penalty and tax liability could arise if any overpayment is not repaid in time and there is a failure to notify HMRC about it.

The Institute of Chartered Accountants in England and Wales (ICAEW) has reported that letters have been sent by HMRC to employers in cases where:

  • The business may have claimed more Coronavirus Job Retention Scheme (CJRS) grant than they are entitled to.
  • The business may not meet the conditions to receive the grant (e.g. including ineligible employees on a CJRS claim).

The letters ask employers to review their CJRS claims and contact HMRC to confirm whether there has been a mistake or not.

Legislation has been introduced in Part 4 and Schedule 16 of Finance Act 2020 to enable recovery of CJRS overpayments. The aim of their compliance work is to identify and address incorrect claims, particularly those arising from deliberate non-compliance and criminal behaviour. HMRC will not be actively looking for innocent errors in their compliance approach.

If there has been a CJRS overpayment and the employer voluntarily repays it within appropriate time limits, HMRC say it will prevent future investigations and tax liabilities. A penalty may be charged if HMRC is not notified of the overpayment. If the penalty relates to deliberate non-compliance, HMRC may publish details of Deliberate defaulters.

HMRC have released a factsheet containing guidance for employers on what to do if they have received a CJRS grant they are not entitled to and the penalties which may apply if HMRC is not notified in time.


COVID-19: Coronavirus Job Retention Scheme
Coronavirus Job Retention Scheme: a cash grant that is designed to allow employers to retain staff who would otherwise be laid off. 

Publishing the names of deliberate defaulters
Section 94 FA 2009 permits HMRC to publish the names of deliberate tax defaulters when certain narrow conditions are met.

Finance Act 2020: Tax update & rolling planner 2020-21
This rolling planner tracks the key tax announcements that affect the 2020-21 tax year and beyond.

External link

HMRC Factsheet: CJRS – receiving grants you were not entitled to