A term which many of us had never heard 19 months ago has now become a firm fixture in our vocabulary. The furlough scheme, which was first introduced in March 2020 at the start of the COVID-19 pandemic, was only intended to be a short-term measure. It has, however, continued on (with several iterations and extensions along the way) with the scheme finally closing on 30 September 2021.
As the final deadline for furlough claims has now passed, whilst still fresh in the mind, it is a good time for businesses to take stock of the claims made and consider any final actions to take.
There is currently a small window of opportunity for any underpayments relating to September 2021 claims to be made, with an amendment deadline of 28 October 2021. Beyond this date it will not be possible to claim back any additional support under the furlough scheme, unless it can be agreed with HMRC that the business has a reasonable excuse for submitting a late claim.
With the end of the furlough scheme, it is inevitable that HMRC will be undertaking a large scale review of all claims made and we are anticipating a new wave of enquiry letters to be issued to businesses in the near future. A dedicated Taxpayer Protection Taskforce, staffed by more than 1,250 HMRC employees, was announced as part of Budget 2021 to help investigate incorrect or fraudulent COVID-19 support claims.
Some businesses have already taken action, with a total of £1.3 billion furlough repayments to date. This will be due to various reasons, with some employers determining that their business was not adversely affected by the pandemic, as had originally been envisaged and, therefore, making voluntary repayments. For others, it may be overclaims where inaccuracies have been identified in previous claims submitted.
Research has shown that many businesses have not looked back at historical claims to check their validity and accuracy. We would recommend that a review is undertaken, as a matter of course, to highlight any possible issues or exposure before any HMRC enquiry and determine whether a disclosure should be made. HMRC can impose penalties up to 100% of an overclaim assessed, which could be mitigated with an unprompted disclosure.
If you would like any assistance with a review of your furlough claims made, please get in touch with Katie Williams or Laura Heaton on 01242 237661.