Supporting employers with the Coronavirus Job Retention Scheme and furlough

With over 200 changes to HMRC’s guidance and numerous Coronavirus Job Retention Scheme (CJRS) Treasury Directions published, navigating compliantly through the maze of the CJRS has not been easy.

CJRS has been used to help protect over 11.5m jobs with c.£61bn paid out to date. Given this, there is a need for the Government to ensure this total has been claimed fairly. Therefore, HMRC is now turning its attention to compliance, with a particular focus on “furlough fraud” and identifying where UK businesses have abused the original spirit and reason for CJRS being made available.

Reviewing your CJRS governance and claims

HMRC will be particularly interested in those that have abused CJRS and taken advantage of workers by claiming CJRS grants even though they may still be working. Indeed, HMRC has been sending “nudge” letters to employers to start investigating these matters. 

However, all employers who have used CJRS should take stock and review what they have historically claimed as the scheme winds down with an expected end date of 30 September 2021.

Making genuine technical errors will not see HMRC throw the book at organisations (this will be reserved for the most serious offenders), but it will be important to identify these technical errors and pay back amounts overclaimed to reduce the risk of penalties. 

Find out how we can help

Key CJRS compliance areas

To help, we set out below ten key areas where overclaims may have arisen:

1. No documented furlough agreement in place with the employee

2. Incorrect pay elements used to calculate CJRS claim

3. Employee paid less than the CJRS grant received

4. The interaction with salary sacrifice both in calculating qualifying furlough pay and in making sure pay during furlough (after salary sacrifice) is at least equal to the CJRS grant received

5. Zero-hour workers and calculating average pay

6. Making a claim for pension and National Insurance Contributions (NIC) when there has been no actual payment made by the employer for these elements (e.g. not in a pension scheme, aged under 21)

7. Calculating usual and furloughed hours for those who have been on Flexible Furlough

8. Making sure claims remain valid when considering interaction with holiday (e.g Christmas shutdown week)

9. Understanding what pay elements and pay periods to include when calculating the CJRS claim for variable pay workers

10. How employers can demonstrate that their employees did no work whilst they were on furlough

There are other areas of difficulty too, but we see these less frequently.

How we can help

We offer a range of services to assist and support business with their CJRS compliance and governance, including:

  • Supporting your business with making accurate CJRS claims and submissions to HMRC until 30 September 2021.
  • Undertaking a high-level review using our bespoke questionnaire approach - this will help flag potential risk areas in CJRS governance and establish clear next steps for a more detailed review.
  • Supporting your business with looking beyond the calculation - how has furlough interacted with pay and benefits; was the communication robust and compliant to establish furlough and prohibit work; and how were these aspects then managed in practice?
  • Carrying out detailed claim-by-claim assessments using our developed analytical approach to scrutinise and feed back our findings. Alternatively, we can review specific scenarios and claim calculations (e.g. flexible furlough, salary sacrifice, etc).
  • Assisting your business in making any disclosure to HMRC to pay back any CJRS overclaim.
  • Supporting with prompted HMRC reviews – if a nudge letter has been received, we have a team of specialists and experienced former HMRC inspectors who are well placed to assist. 

Please do get in touch to discuss the CJRS/furlough support you would like to consider further by clicking the button below.

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Other aspects to consider

Additionally, as CJRS comes to a close, we can also support your business by helping you:

  • Review National Minimum Wage (NMW) compliance, particularly where flexible furlough has been used, or employees have been required to purchase masks / extra uniform or turn up earlier / leave later than normal;
  • Assess the potential for reducing employment costs by reviewing reward strategy (cars, pension, pay, training, workplace, training); and
  • Looking at broader risk governance matters, including assessing exposure to the Corporate Criminal Offence of failure to prevent facilitation of tax evasion.

Get in touch today