Overclaimed COVID grants?

A new law has not been enacted that provides HMRC with powers to recover grant payments to which the recipient is not entitled, as well as to charge penalties. The law is clear that the onus is on the taxpayer to notify HMRC if they have overclaimed a CJRS or SEISS grant and this must be done within 90 days by 20 October 2020 or 90 days of receipt of the grant, whichever is the later. HMRC may issue assessments to recover overclaimed grants.

For SEISS grants the key risks affecting entitlement are:

· the trade was not adversely affected by coronavirus;

· the trade did not continue in the tax year 2019/20 (eg, because the business was incorporated); or

· there was no intention to continue to trade in the tax year 2020/21.

The key risks affecting entitlement to CJRS grants are:

· grants not used for the purposes for which they are intended;

· calculation errors; and

· employees working during periods that they are on furlough.