We wrote previously about the increased powers that HMRC are expected to have in investigating and going after any company who is found to have misused the Coronavirus Job Retention Scheme (the "Scheme") and this can be found HERE . We also explained about the upcoming changes to the Scheme from 1 July 2020 FURLOUGH FRAUD as well as FURLOUGH PENALTIES
We know that this sounds quite frightening, especially with HMRC's draconian powers of enforcement. However, companies will have some leeway in reporting and they are expected to have a reasonable period of time to review their application (currently 30 days, but there are talks about this being increased somewhat) and processes and let HMRC know if any mistakes have been made in their applications. It is so important to bear in mind that HMRC are not looking to punish genuine mistakes, so it is better to 'come clean' if any have been made.
In order to avoid mistakes going forward, especially with the changing Scheme, here are some practical tips for companies to consider:
Keep the company's use of the Scheme under constant review – do you need to keep the employees on furlough, or can they return to work?
Ensure that all records are up to date – the paper trail is so important and must be kept accurate and well-calculated, because the documents are the only protection the company would have to show that the application was made genuinely. It would also be sensible to review the previously made applications to ensure that they were done correctly (hindsight is 2020, right?);
Ensure that any managers are well trained on what the Scheme means and what they can and cannot ask their employees to do – with the changes to the Scheme where employees will be able to return on a part-time basis, this is particularly important so that clear lines are drawn and adhered to; and
Understand the Scheme and the way that the claims ought to be calculated – if you are not sure, there is no harm in asking for help or a second pair of eyes to check it out, would be better than to run the risk of having made a mistake and being penalised by HMRC.
Of course, we are happy to provide more specific and individually-tailored advice to any clients that might require it – whether you have instructed us in the past or not.
There is a lot of scrutiny for companies out there and we continue to advise our clients to take the Scheme and its rules seriously but utilise it where appropriate to assist the business. If you have any questions, please do not hesitate to contact our expert team here at Gepp Solicitors.
Phone: 01245 228141
This is not legal advice; it is intended to provide information of general interest about current legal issues.