Following the Chancellors first announcement around the economic support packages, the cost is now at an estimate of £132.5bn.
The CJRS was set up as a new wage support measure in response to the Covid-19 pandemic to protect jobs in wake of the impact to the economy caused by the virus and to support employers who had difficulties continuing to pay wages to prevent redundancies being made.
So what is the clawback?
The government are now looking to recover funds claimed in error or fraudulently during the pandemic. This will be recovered by each pound of CJRS claimed incorrectly into an additional pound of income tax liability until 100% of the funds have been reclaimed.
HMRC is also introducing a new power to assess this income tax liability, which will be available as soon as the draft legislation completes its passage through Parliament.
While the draft legislation contains no specific penalties for taxpayers who have made a mistake/error in any claim for support from the Government, it does contain rules to penalise those who do not notify HMRC of their error within the time limit. The ‘failure to notify’ penalty has been used by HMRC in other tax enforcement campaigns.
It is understood that HMRC have now received around 1900 reports of fraudulent claims under CJRS up to the end of May which has increased since, which is why there is an urgency to get this legislation in place.
The new legislation is being rushed through to be included in the current finance bill, which is expected to become law in July 2020.
Here at ePayMe we have worked closely with our clients and legal team to ensure that claims put forward to the CJRS were accurate by collecting the relevant documents and information required before placing anyone on the CJRS in line with the guidance provided by HMRC and the legal team.
We have always shouted about the service we provide and the pandemic was not going to allow us to let our standard slip.
Contact us today for a confidential chat about your payroll options and how we can support your business following Covid-19.
Tel: 01252 863 700 Email: sales@epayme.co.uk