HMRC to Claw Back Furlough Errors

HMRC and the National Audit Office estimate between 5-10% of furlough money claimed throughout the Coronavirus pandemic remains over-claimed, and business owners remain oblivious. 

When the furlough scheme ended on the 30th of September 2021, over £70 billion remains claimed.

Nearly 9 million people were on furlough at the pandemic peak.

However, despite the furlough scheme, around 1 million people were made redundant between April 2020 and June 2021. 

So, therefore, check your furlough claims in detail to confirm you are not accidentally making any errors, as HMRC will examine all incorrect claims over the next few years.

A recurring error – claiming for a flexible furlough on calendar days instead of working days, of which there are only 260.

Furlough claims

HMRC to Claw Back Furlough Errors if you have overclaimed?

If you already know you have over-claimed, you should notify HMRC.

How do you repay overclaims?

However, any furlough overclaims can be repaid through the Government’s website before HMRC charges interest and penalties. 

You can correct it in your following claim, meaning HMRC will reduce your new claim. However, you’ll need to retain a record of the adjustment for six years or apply for a payment reference number, and within 30 days, pay back HMRC. 

You can make a voluntary payment if you do not need or want the grant to pay your employees’ wages, tax, National Insurance and pension contributions. 

Rectifying overclaims in your ensuing claim?

To repay in your ensuing claim, you need to:

  • Firstly, work out the claim amount as usual, without details over the overclaim;
  • Work out over-claim;
  • Deduct over-claim from your original claim amount;
  • Enter the result in your claim form’s ‘claim amount’ box;
  • Enter the amount overclaimed in the ‘overclaim’ box.

HMRC suspecting fraud

Should HMRC suspect fraud, it will prompt a serious in-depth investigation into suspected fraudulent furlough claims?

Investigations will be extended to the wider business and personal affairs of the business owners involved. New legislation includes powers for HMRC to pursue company office holders where businesses become insolvent, with joint and several liability.

Such investigation will have an impact on directors duties and responsibilities.

For assistance with furlough claims, please contact the team at HBG Advisory on 0800 6121 5448


Bounce Back Loan advice for Company Directors

Directors should seek professional advice if they have Bounce Back Loan worries regarding repayments. The UK government introduced the COVID-19 support scheme to support businesses through the pandemic. However, repaying the loans has been difficult. So ensure you seek advice sooner than later.