In Luca Delivery Limited v HMRC [2023] TC8752, the First Tier Tribunal (FTT) heard an appeal against a reclaim of a cash grant paid under the Coronavirus Job Retention Scheme (CJRS). It found that failure to meet the scheme conditions was due to a mistake by the taxpayer’s accountants and that was no defence. It did not allow the claim to be validated.

  • Luca Delivery Limited (Luca) made claims under the CJRS for its director, Mr Padilha and his wife Ms Sartor.
  • HMRC issued assessments to reclaim the CJRS paid to Luca in relation to Ms Sartor as she had not been included on a Real-Time Information submissions prior to 28 February or 19 March 2020.
  • Mr Padhila challenged the assessments on the basis that the reporting errors were down to their accountants.
  • Following a Statutory Review which upheld HMRC’s decision, Luca appealed to the FTT.

The FTT found that:

  • The failure to include Ms Sartor on the payroll was caused by the accountants as they:
    • Were responsible for running Luca’s payroll.
    • Had failed to carry out his instruction to add Ms Sartor to the payroll.
  • The legislative requirement for CJRS payments was strict and was not met as:
    • Ms Sartor was not included in February or March 2020 RTI submissions.
    • An amendment to an existing return would not meet the conditions for payment of CJRS.

The appeal was dismissed.

Editorial note
There is no concept of 'a reasonable excuse' if one fails to meet qualifying conditions for any type of tax claim or relief, as you either meet the conditions or you don't. A 'reliance on a third party' is however one grounds for appeal, in case respect of a tax penalty. e.g. a penalty for an error or mistake on a tax return.
In this case, the taxpayer would need to make a claim against the accountant's professional indemnity insurer.

Useful guides on this topic

COVID-19: Coronavirus Job Retention Scheme (CJRS) to 30 September 2021
What is CJRS? When does the CJRS apply? How to claim CJRS. How to calculate CJRS claim amounts.

COVID-19: Coronavirus Job Retention Scheme (CJRS) to 31 October 2021
Coronavirus Job Retention Scheme (CJRS): a cash grant payable to employers up to 31 March 2021.

Statutory Review (by HMRC)
What is a Statutory Review? Is it automatic? What happens in a Statutory Review? Can you challenge a Statutory Review's findings? Can you influence a Statutory Review? 

RTI: Real-Time Information for PAYE (Freeview)
What is RTI: Real-Time Information (RTI) reporting for PAYE? How does it work?

External links

Luca Delivery Limited v HMRC [2023] TC8752


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