Overpayment Of CJRS support – HMRC Enforcement Action

Where employers have received support to which they were not entitled, HMRC must be notified of the overpayment.  There are strict timelines in place for this notification to be made; failure to do so is considered by HMRC to be a ‘failure to notify’. 

As such, any overpayments received in relation to support payments under the CJRS must be reported to HMRC at most 90 days after the date the employer received the amount that they were not entitled to (or after the date on which the employer ceased to be entitled to retain the amount paid).  HMRC notes that the overpayment may have occurred due to a change in the employer’s circumstances or perhaps because the employer did not, within a reasonable period of time, use the support grant to pay the costs it was intended to reimburse.

Whatever the reason, employers should be mindful of the consequences of a ‘failure to notify’.  HMRC intend to charge penalties, the value of which will be designed to reflect the seriousness of the failure.  They will, for example, take in to account whether the employer was deliberate in their failure to notify, whether they also looked to conceal the overpayment or whether it was non-deliberate.  They will also consider whether any notification made was ‘unprompted’ or ‘prompted’ – these essentially related to whether or not HMRC had commenced an investigation at the time of the notification.  Penalties can be reduced for employers who work with HMRC in their investigations, known as ‘telling, helping and giving.’

The penalty ranges are as follows:

Type of behaviour  Unprompted or prompted
Penalty range
Non-deliberate Unprompted – within 12 months
of tax being due
0% to 30%
Non-deliberate Unprompted – 12 months or more
after tax was due
10% to 30%
Non-deliberate Prompted – within 12 months of
tax being due
10% to 30%
Non-deliberate Prompted – 12 months or more
after tax was due
20% to 30%
Deliberate Unprompted 20% to 70%
Deliberate Prompted 35% to 70%
Deliberate and concealed or treated as deliberate and concealed Unprompted 30% to 100%
Deliberate and concealed or treated as deliberate and concealed Prompted 50% to 100%

Remember – if HMRC are deliberately misled, whether through dishonest misrepresentations or the giving of false information, they intend to conduct criminal investigations with a view to prosecution.

For employers, we recommend that claims are carefully vetted prior to submission. In addition, it is prudent to also internally audit sums received for each claim. This audit should ensure that the sums claimed are correct and properly paid to employees in full.  

Share this post