What should I do if I am concerned that I could have overclaimed furlough payments?

It is clear the government and HMRC are significantly upping their rhetoric regarding furlough fraud. I have just read an announcement that two individuals (including an accountant) have been arrested this week. Latest estimates suggest between 5% and 10% of furlough payments are believed to have been paid to recipients who were not entitled to the money. HMRC are reported as having identified 27,000 high risk claims to investigate. The authorities are making it clear they will undertake criminal proceedings against those who have clearly submitted fraudulent or dishonest claims.

Hopefully this will be simply of reassurance to anyone reading this – furlough payments have to be repaid and logically it will be the UK taxpayer who will have to pay it back. We don’t want to have to subsidise the ill gotten gains of fraudsters!

But I am also aware the scheme was introduced by necessity with haste, and such it is possible incorrect claims could have been submitted innocently due to a misunderstanding of the hastily thrown together rules. Were staff properly placed on furlough from the outset? Were they furloughed for at least 3 weeks? Have they undertaken no work for their employer during the period of furlough (this includes voluntary work)? Has the correct amount been claimed (which can be tricky to calculate for those who work variable hours, for example)? Have the furloughed staff been paid the correct amount?

What should anyone who is concerned they might have been overpaid do? If you are in doubt, I would either seek either professional advice, or contact HMRC. For our clients, give your usual contact a call. We will be happy to check things over. 

Should it then become clear that you have been overpaid, then bring it to HMRC’s attention ASAP. If you are still claiming furlough payments, you can notify HMRC via a future claim that you have an overpayment to report. The overpayment can be deducted from future grant payments. If the overpayment exceeds entitlement to future grant payments, then you are advised to call HMRC, and obtain a payment reference number. The telephone line to call is 0800 024 1222. If you can’t get through, then send them a letter. 

HMRC will give employers either until 20 October 2020, or 90 days from then the payment was made (whichever is later), to disclose errors.  

Judging from my own experience of when clients ‘come clean’ with HMRC they are grateful they have, and they are not likely to then be interested in the reason for the error – as long as any overpayments are repaid. Whereas if they discover an error, typically they will want chapter and verse on the reasons that led to the submission of an incorrect claim as they will be interested in whether they can impose financial penalties, or worse.

If you have any questions please get in touch! You can call us on 01243 782 423 or head to our contact page.