HMRC have announced a final deadline for submitting or amending JRS claims – employers should act now to ensure any underclaims are corrected in time
HMRC have confirmed 30 November 2020 as the deadline for submitting or amending JRS claims. In addition to ensuring final claims are submitted on or before 30 November, employers should review previously submitted claims to identify any underclaims that must be corrected before that date. Separately, unless previously repaid, any overclaims that arose before 23 July must be reported to HMRC by 20 October. Any overclaims that arise on or after 23 July should be repaid or notified to HMRC within 90 days of arising. Amounts still due to HMRC will then be recovered through a special income tax charge on the employer.
The Treasury issued a new Direction on 1 October that provides JRS claims cannot be made after 30 November 2020. HMRC subsequently updated their guidance to confirm that after 30 November it will not be possible to submit any further claims or add to existing claims.
Act now to correct any underclaims
Employers who underclaimed JRS grants still need to ensure furloughed employees receive their full entitlement. The full cost of correcting any underpayments made to employees will fall on the employer unless it is possible to amend the deficient JRS claims.
Therefore, as well as ensuring final claims are submitted on or before 30 November, employers who took an overly prudent approach to calculating ‘reference pay’, or to any other aspect of calculating their JRS grants, should revisit those calculations to ensure they identify and correct any underclaims before the deadline.
What about overclaims?
Additionally, employers must repay HMRC when a JRS claim is overstated, or a previously correct claim becomes excessive (e.g. where an employee undertakes revenue generating work during furlough hours).
Employers must formally notify HMRC of overclaims that are not repaid before the relevant reporting deadline. Amounts still due to HMRC will then be recovered through a special income tax charge on the employer.
This is not affected by the new 30 November deadline.
Overclaims that arose before 23 July must be repaid or reported to HMRC by 20 October. Any overclaims that arise on or after 23 July must be repaid or reported to HMRC within 90 days of arising.
For more information on correcting JRS errors, please see our Perspective on the JRS penalty and enforcement regime (4 August) and articles on HMRC’s JRS compliance activity (7 September) and ‘nudge’ letters (24 September).
Further information on the JRS, the Job Retention Bonus and the Job Support Scheme is available in our JRS Q&A.
For further information please contact:
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