Did you receive Covid support? Check you were eligible to avoid a penalty

If you are a business owner who received grants in the form of either the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme, we’re advising you to check your eligibility. Being proactive here can prevent fines and HMRC are taking a thorough approach to their investigations.

If you know that the claim you made may not have been required, so for example, your trade didn’t suffer - it would be prudent to make a voluntary application to repay the claim. HMRC are prepared to accept that most of the false claims made were not deliberate, but their investigations will be rigorous.

Fines can be calculated up to 100% of the amount claimed and you will incur the maximum fine if you deliberately don’t tell HMRC and attempt to conceal that a grant has been awarded in error. We recently summarised the process for identifying a false claim and paying back what you owe, but if you’re still unsure it’s best to check HMRC’s guidelines.

What action is HMRC taking?

A freedom of information act has revealed the extent of the action that HMRC had taken up to the end of March 2021.

It revealed that the number of enquiries regarding the Coronavirus Job Retention Scheme was 7,384 and there had been five arrests! While there had not been any arrests related to the SEISS grant at that point, they were conducting over 5,000 enquiries.

The Government are ploughing £100 million into a Coronavirus taskforce. In reality, investigations are probably only covering a six to eight month time period, but HMRC expects the full review to take five to six years. According to The Financial Times, by the end of May this year, there had been 28,444 notices of potential furlough fraud reported.

Does your business owe PAYE taxes and National Insurance? Your Coronavirus Job Retention Scheme payments could be stopped.

As of the end of May 2021, there were 2.4 million employees still on furlough which is considerably down from just under 9 million back in May 2020. It is expected that this figure may fall as the economy starts to open up; especially given that employers have to contribute more to the furlough scheme.

Some sectors such as the holiday industry, aviation, hospitality, leisure and retail are still struggling to such an extent that some businesses still owe back PAYE taxes and national insurance monies which effectively have come from furlough payments to date.

HMRC are now stating that those businesses which owe nine months or more back taxes of this ilk will not receive any further payments under the Coronavirus Job Retention Scheme unless they enter into a manageable repayment arrangement with them.

Our understanding is that HMRC has already started sending out warning letters to this effect.

To talk more about how we can help you manage your support claims, get in touch today. Based in West Bridgford, Nottingham, M.A.D Accountants support businesses and individuals nationwide.