HMRC has updated its coronavirus job retention scheme guidance to cover how employers should deal with underpayments to employees that come to light when filing tax returns, and offsetting overclaimed amounts against underclaims in the same claim period.
Where employers have claimed under the CJRS but, when filing their tax return, find they have underpaid wages during the relevant period, they are required to make good any underpayment to employees within two months of the statutory filing date of the return. The guidance gives an example of Company A whose company tax return is due on 31 December 2021; HMRC would expect Company A to reflect the errors in its 31 December return and make good the wages shortfall by 28 February 2022.
Where employers have included provisional figures in their return, they must provide final figures to HMRC as soon as reasonably possible. Employers will have up to two months from the date that final figures are provided to make good any wages shortfall to employees.
The guidance also confirms that, from 11 October 2021, employers can offset overclaimed amounts against underclaims for other employees in the same claim period, for:
claims and amendments for September 2021
late claims and amendments where there is a ‘reasonable excuse’, and
disclosures of overclaims for any claims period
HMRC will not, however:
allow any amendments to past disclosures, or
re-open any assessments based on the guidance in place at the time
HMRC has updated its coronavirus job retention scheme guidance to cover how employers should deal with underpayments to employees that come to light when filing tax returns, and offsetting overclaimed amounts against underclaims in the same claim period.
Where employers have claimed under the CJRS but, when filing their tax return, find they have underpaid wages during the relevant period, they are required to make good any underpayment to employees within two months of the statutory filing date of the return. The guidance gives an example of Company A whose company tax return is due on 31 December 2021; HMRC would expect Company A to reflect the errors in its 31 December return and make good the wages shortfall by 28 February 2022.
Where employers have included provisional figures in their return, they must provide final figures to HMRC as soon as reasonably possible. Employers will have up to two months from the date that final figures are provided to make good any wages shortfall to employees.
The guidance also confirms that, from 11 October 2021, employers can offset overclaimed amounts against underclaims for other employees in the same claim period, for:
claims and amendments for September 2021
late claims and amendments where there is a ‘reasonable excuse’, and
disclosures of overclaims for any claims period
HMRC will not, however:
allow any amendments to past disclosures, or
re-open any assessments based on the guidance in place at the time
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