A growing number of firms that have claimed support under the Coronavirus Job Retention Scheme (CJRS) – more commonly referred to as the furlough scheme – are making refunds to HMRC on the basis that they should not have claimed or that claims were made in error.
In part this is due to an active campaign by HMRC to point out that claims must be based on certain qualifying conditions, and that if these conditions are not met, then any grants received will need to be repaid.
It is assumed that if you have made claims under the CJRS that these claims comply with the multitude of conditions that attach to the scheme. But have you completed the necessary steps when you registered? In particular, have you recorded why you think your business has or will be adversely affected by the COVID outbreak and therefore in need of government funding?
Do you have evidence to support your furlough claims?
If you have made or continue to make claims under CJRS there are basic records that should be kept. These records have to be kept for five years and will be required to support claims made if you are audited by HMRC.
Basic records required are:
- Written agreements with staff that have been furloughed
- A record of your reasons for placing staff on furlough, essentially, why you think your business was and is adversely affected by the COVID-19 outbreak
- A record of how many hours are worked and the number of hours furloughed – if claiming under the flexible furlough rules from July 2020
- Supporting payroll records that demonstrate how grants received have been processed.
We can help
Although you may have taken steps to maintain some or all these records we recommend that we take a look and advise if further work needs to be done.
As the CJRS is closing 31 October 2020, HMRC will no doubt be targeting claimants to make sure their claims were valid.
In particular, we can help you:
- review agreements with staff and provide you with draft ACAS formats if required,
- prepare a COVID “Compliance Diary” that sets out your reasons for placing staff on furlough, and
- review your payroll records to ensure all is in order.
Best to be prepared. Don’t wait until the brown envelope appears on your doorstep.