New guidance on repaying Job Retention Scheme payments

The new guidelines come after HMRC has accepted certain historical underclaims may be deducted by employers when calculating any repayments due for overclaims. However, for an amount to be available for offset, the employer must have paid it to the furloughed employee within a reasonable time.

The new guidance is relevant to employers correcting historical errors and ensuring their compliance position is robust.

The time frame permitted to correct errors is within 12 months of the end of the accounting period in which the underclaim was made. As HMRC and auditors review claims, it is increasingly apparent that errors have resulted in both underclaims for some employees, and overclaims for others, in the same claim period.

Employers that claimed CJRS grants must ensure those claims were based on a reasonable interpretation of HMRC’s then-current guidance and prepared with reasonable care.

Separately, HMRC is carrying out a series of reviews that will last until at least March 2023.

Employers must repay HMRC where a CJRS claim was overstated, or a claim subsequently became excessive (e.g. where it is discovered that a furloughed employee returned to work sooner than expected).

CJRS grants must also be repaid to HMRC if:

The employees to whom the claims relate did not receive at least their minimum furlough payment entitlements

The employer does not make good any shortfall in the employee’s minimum furlough pay entitlement within 12 months of the end of the accounting period in which the underpayment arose

For claim periods that began on or after 1 November 2020, any underclaimed CJRS grants had to be claimed within, generally, 28 days of the end of the relevant calendar month