Error investigations on furlough claims

HMRC have announced penalties for Coronavirus Job Retention Scheme (CJRS) grant errors. The penalty can be up to 100% on top of the grant overpayment. The penalty reduces to as little as 0% if HMRC are informed of the error and any amount received as a result of an error is repaid.

Examples of an overclaim include:

  • receiving a grant despite not being eligible for it
  • claiming a grant after the change of circumstances, which make an individual, a partner or a company not eligible for a grant (such as claiming CJRS for an employee who no longer works for a company).

If at least one of the above cases apply, you are required to inform the HMRC about the overclaimed grant and pay back the overclaimed amount within the relevant time period: 90 days from receiving the overclaimed grant, 90 days after the change of circumstances (whichever applies in your case) or by 20 October 2020 (the later of the two dates being the final deadline).

HMRC focused on paying money quickly, now they will make an example of rule breakers. Expect investigations, keep your records in order.


When paying Job Retention Scheme grants, very few employers were contacted by HMRC to check their eligibility. HMRC are known to be investigating thousands of claims that have already been paid out. We recommend keeping clear records of what you have claimed, who it was for and any proof you have that the employee was eligible for the grant payment.

HMRC have prepared the document which gives more details about the planned investigations.

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on whatsapp

Other Insights

VAT on hospitality and setting your prices

The reduced VAT rate of 5% for the hospitality industry is due to end on 30 September 2021. It’s time for businesses to consider how this will impact their trade.

To prepare, we recommend that our clients: review their prices; prepare till systems for the change; save for their VAT bill; constantly monitor their business’ performance.

Read More »

Electric cars can save you tax

Imagine being stood in the car show room, wondering whether you should buy an electric car. You are busy considering which model will suit you best and the sales team start telling you about the many benefits of buying through the company.

Read More »


You will be able to claim a deduction from your corporation tax bill if you invest in new productivity enhancing plant and machinery. The expenditure

Read More »

This website uses cookies to ensure you get the best experience on our website.