HM Revenue & Customs (HMRC) recently advised that the claims window for the Self-Employed Income Support Scheme (SEISS), covering the three months from February – April 2021, is open and will remain so until 1 June 2021. There will be a fifth grant made available to those who qualify in due course, covering the period from May – September 2021. However, it is important that those who might have wrongly claimed in the past should come clean.
Similarly, the Coronavirus Job Retention Scheme (CJRS) will run to the end September 2021 for employers, and a similar warning goes out to businesses that may have wrongly claimed, or unwittingly had employees working whilst ostensibly on furlough.
“It was announced in the Budget that the government was providing an additional £100 million of funding to HMRC to facilitate investigation and recouping of a suspected £3.5 billion in fraudulent Covid support scheme claims. We are aware of several cases where queries have been raised by HMRC, across various sectors, including the farming sector, and we would advise any claimant who believes that they may have wrongly claimed to raise this with HMRC at the earliest opportunity, either directly or through their adviser.”
Those that qualify for the SEISS may claim up to 80% of three months’ average trading profits, subject to a cap of £7,500. The average monthly trading profits are determined with reference to historic levels, potentially going back to 2016-17. Grants available under the CJRS may pay up to 80% of monthly salaries, up to a maximum £2,500 per employee, for May and June, reducing to 70%, or a maximum of £2,187.50 in July, and then to 60%, up to maximum of £1,875, in August and September. Employers should continue to deduct income tax and NICs from payments to employees and pay these to HMRC, and pension contributions will usually continue as normal. The employer must make employee payments up to 80%, contributing the additional 10% in July and 20% in August and September. Affected employees must be placed on furlough leave and undertake no work for the claiming employer. HMRC will be especially keen to identify where furlough rules have been breached, and whistle blowers, who have been asked to work by their claiming employers, have been coming forward.
Saffery Champness is also reminding businesses and the self-employed that grants received through either the SEISS or CJRS are taxable income.
Martyn Dobinson says:
“We strongly advise that time is taken to review any claims made, and where appropriate, arrangements are made to repay any wrongly claimed support. Many claimants have already done so, with a reported £760 million repaid to date. Whilst HMRC will clearly be looking to focus its efforts on the most serious of cases, and blatant abuse of the system, smaller businesses and individuals could easily be caught up in this claim recovery programme, and could be subjected to an intrusive forensic investigation, which any taxpayer would be keen to avoid.”