Repaying COVID-19 Support

May
12
Posted 2021 by Jenny Bowden

As lockdown easing continues and the re-opening of many more businesses permitted in the Step 3 of Boris’ roadmap, now is a good time to reflect on furlough and the SEISS grant eligibility

Furlough claims and SEISS grants have been made with an expectation of a decline in sales and reduced level of work for staff. In some cases, with the benefit of hindsight, some businesses will realise that they were incorrect to claim, whilst others having fared better than they expected or realised as they come around to preparing their annual financial statements may wish to return the furlough grants claimed or disclaim the 4th SEISS grant.

It will be very easy for HMRC to read a set of accounts that present improved results which could initiate a compliance check into the validity of these claims. Furlough claims may have inadvertently been made during periods when work was undertaken therefore it is sensible to review the situation carefully. With SEISS claimants are permitted to work however additional eligibility criteria applies to the 4th grant in that HMRC expects a significant reduction in business profits.

If adjustments are required there is an online function for businesses to repay furlough grants claimed in error or for grants claimed that they now realise they do not need.  If you have overclaimed a grant and have not repaid it, you may have to repay the value of the claim and a penalty of up to 100% of the tax due. If you do repay any overclaimed grant, this will prevent any potential tax liability and penalty in respect of the overpayment of Coronavirus Job Retention Scheme. The Furlough repayment facility is an opportunity to correct the position irrespective of how a claim was made.

Whilst every business and individual has been affected by Covid, HMRC give an example that additional costs associated to purchasing sufficient PPE is not in itself an adverse impact.
Contact us to find out how to pay all or some of your grant back if you’ve overclaimed, if you do not need the grant and want to make a voluntary repayment or to help you decide on the appropriateness of claiming for the 4th Self Employed Income Support Scheme grant.