CJRS – clawback scheme introduced by HMRC

The Coronavirus Job Retention Scheme has been used by many businesses throughout the UK during the pandemic as a way of keeping afloat and avoid laying off staff. This initiative has cost the government £30billion in claims alone.

HMRC were clear from the start that they would not accept misuse of the scheme. Backing this statement, they have now announced a new ‘clawback’ scheme designed to make those who claimed wrongly or unfairly pay. The proposal confirms that the furlough grants will be taxable, and if wrongly claimed, whether on purpose or in error, the payment will be taxed at a rate of 100%.

While this is encouraged by many, some businesses face uncertainty over claims they have made due to the confusing and unclear guidelines originally introduced by HMRC as the scheme went live.

Joanne Harris, technical commercial manager at Nixon Williams stated ‘while it is right that HMRC should take a tough stance on deliberate fraud in relation to these support schemes, the potential for genuine errors is high with the CJRS, particularly as government guidelines have been seemingly unclear and are changing frequently’.