In some circumstances, HMRC allows employers to offset over and under claims of CJRS grants. This avoids the two-step process of the employer repaying an overclaim, only then to claim an additional amount from HMRC to correct an underclaim.
However, it’s important employers don’t confuse correcting over and under claims with correcting over and under payments. Where HMRC allows claims to be corrected by netting off, employers still need to calculate the under and over payments for each worker to demonstrate that:
- employees received at least the minimum amount due to them under the CJRS
- the full value of the CJRS grant received was used to pay workers.
If you identify workers who didn’t receive the minimum amount they were entitled to under the CJRS because you underclaimed for them, you will now find yourself in a position of having to make extra payments to these workers to make up the difference. Not doing so may invalidate your claim.
This might be particularly concerning for employers who excluded variable pay elements such as overtime, allowances and commission when calculating the amounts furloughed employees were entitled to because of uncertainty in how the rules should be applied. It’s vital that employers reassess those decisions to test whether they can be defended as a reasonable interpretation of employees’ terms and conditions and the current guidance.