In Zoe Shisa Events Limited v HMRC [2023] TC8805, the First Tier Tribunal (FTT) found that backdated payslips could be used for an employee Coronavirus Job Retention Scheme (CJRS) claim as the pay was evidenced by bank statements for that period. A director's salary increase could not be evidenced and the CJRS claim was restricted for that part of the claim.

  • Zoe Shisa Events Limited (ZSE) operate a shisha establishment based on a terrace of a London hotel.
  • In August 2019 ZSE parted with its accountant and no PAYE Real-Time Information (RTI) returns were filed until May 2020.
  • The establishment was forced to close because of the COVID-19 pandemic.
  • Claims were made under the Coronavirus Job Retention Scheme (CJRS) on the basis that:
    • Ms Muntean, the director, was paid a salary of £3,000 per month.
    • Mr El Sayed, an employee, was paid a salary of £1,280 per month.
  • HMRC opened a compliance check and raised assessments contending that the RTI figures on which the CJRS claims were based, were inflated as the last filed returns showed lower salary figures.
  • Following a Statutory Review which upheld the decision, an Appeal was made to the FTT.

The FTT found that:

  • The CJRS claim for Mr El Sayed was correct:
    • While the last RTI returns submitted prior to March 2020 showed a salary of £800, bank statements for the period to 19 March showed that he was paid £1,280, as included in the CJRS claim for the period.
  • The CJRS claims in respect of Ms Muntean should be with a reference to a monthly salary of £600 as:
    • There was no evidence that her monthly salary would be increased to £3,000 before 19 March 2020 as claimed.
    • While the bank statements showed payments in excess of £600, they did not support a £3,000 salary, these payments represented dividends and salary.
    • The RTI documents and payslips for the relevant period were only filed after CJRS was announced and did not provide contemporaneous evidence of the salary increase at the required time.

The appeal was allowed in part.

Useful guides on this topic

COVID-19: Taxation of coronavirus support payments
This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

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

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? 

COVID 19: Coronavirus Job Retention Scheme (CJRS) to 31 October 2020
Coronavirus Job Retention Scheme (CJRS): a cash grant payable to employers up to 31 March 2021.

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.

External links

Zoe Shisa Events Limited v HMRC [2023] TC8805


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