Furloughed your employees? Claimed COVID help for self-employed? How are you sleeping?

As early as September, the press were reporting that up to £3.5bn Coronavirus Job Retention Scheme (CJRS) claims were fraudulent or incorrect. HMRC are equally concerned about COVID Self-Employment Income Support Scheme (SEISS) claims.

Rishi Sunak in his recent budget speech: “We’ll also tackle fraud in our COVID schemes, with £100m to set up a new HMRC taskforce of around 1,000 investigators.”

Those making genuine mistakes will be asked to pay it back. Do this voluntarily and there shouldn’t be any penalty payable. After all, the schemes were invented ‘on the fly’ and were new to all of us. You can pay it back via a reduced future CJRS claim. Or, if you’re not claiming anymore, or it’s SEISS, then contact HMRC for a payment reference. By November 2020, £382m had already been paid back by claimants.

Alternatively, leave it for HMRC to find the errors for you, and you could pay a penalty. The maximum possible penalty is up to 100 per cent of the spurious claim. In the case of genuine error, the penalty is likely to be much less.

Of much more interest to those new, keen HMRC investigators will be rooting out fraudulent claims on both SEISS and CJRS.

SEISS claim criteria include either being unable to trade or being “impacted by reduced demand” due to COVID. Claimants must declare they intend to continue to trade AND believe there will be a significant reduction in profit. Easy to prove when a business is forced to close. Less so if you’ve been trading throughout 2020.

HMRC are currently emailing about 20,000 SEISS claimants querying why they said they were continuing to trade (one of the SEISS qualifying criteria) but have now permanently ceased trading?

CJRS claim criteria include similar stipulations around preserving jobs. Many CJRS claims will fail due to employees working when they were supposed to have been furloughed (and HMRC are asking them!)

This is just the start. If it’s a good night’s sleep you’re after, now might be a good time to re-visit and check the accuracy of claims you’ve made or, indeed, whether you should have claimed at all.

Sweet dreams…


Steve Vickers

Tax Partner

Hart Shaw LLP


0114 251 8850

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