Rishi Sunak to give HMRC ‘draconian’ powers to reclaim hundreds of millions

Jeremy535897

md_26 said:

every person that furlough has been claimed for should have a letter sent to their house asking what dates they had furlough and what dates they had annual leave this year to make sure the employer isn't falsifying claims.

A lot of people will not remember. Others will have reasons to lie. There is no need for such an approach. My bet is that a simple request for the written furlough agreements and evidence of employee agreement will give HMRC plenty of scope for recovery. Following up all the fraud reports will fill in the rest of their available time.

I don't know what the point about annual leave is. That is a matter between employer and employee, including the rate paid, which is by no means as simple as saying "100% not 80%".

unholyangel

hb2 said:

"Ms Fernie also advised that any firm or individual that has benefited from the furlough schemes or grants should also keep evidence that employees paid under the schemes would still have been employed if the pandemic had not happened."

Which seems to fly in the face of the advice that past employees could be re-hired specifically to be furloughed.

Yes and no. 

While the gov have said that employees could be rehired and put on furlough I always understood that to be restrictive in application. In other words, fine in a situation where you let staff go before CJRS was announced. Or they leave but return to their old job (with the intention of actually being employed rather than just qualifying for furlough). But not where they left, were replaced and you then rehire them just to give them an income/because the costs would be met by CJRS. And not in a situation where they were going to be made redundant for reasons unrelated to covid and again, it was just to give them income and because the costs were being claimed under CJRS.

However I'm still trying to work out whats draconian about it. 

JudithF

I received the small business rate relief on April 4 and would like to claim it on 20/21 tax year rather than 19/20. Do you think this will be okay as my turnover for 20/21 is likely to be much lower. Thanks

Jeremy535897

JudithF said:

I received the small business rate relief on April 4 and would like to claim it on 20/21 tax year rather than 19/20. Do you think this will be okay as my turnover for 20/21 is likely to be much lower. Thanks

I assume you mean the small business grant of  £10,000? Ask your accountant.

Grumpy_chap

@JudithF - I assume your are self-employed sole trader. 
I would interpret that the grants have to be declared in the tax year they were received.
There was another thread where a logical argument was put forward that the grants should be accrued to the following year.  I am not sure I agree with it, but it made sense.
As @Jeremy535897 said - ask your Accountant, but do let us know how this concludes.

mobilejo

unholyangel said:

hb2 said:

"Ms Fernie also advised that any firm or individual that has benefited from the furlough schemes or grants should also keep evidence that employees paid under the schemes would still have been employed if the pandemic had not happened."

Which seems to fly in the face of the advice that past employees could be re-hired specifically to be furloughed.

Yes and no. 

While the gov have said that employees could be rehired and put on furlough I always understood that to be restrictive in application. In other words, fine in a situation where you let staff go before CJRS was announced. Or they leave but return to their old job (with the intention of actually being employed rather than just qualifying for furlough). But not where they left, were replaced and you then rehire them just to give them an income/because the costs would be met by CJRS. And not in a situation where they were going to be made redundant for reasons unrelated to covid and again, it was just to give them income and because the costs were being claimed under CJRS.

However I'm still trying to work out whats draconian about it. 

Fine but what is the basis for your interpretation? Would someone who applied Jeremy's interpretation be 'wrong'? Should they be made to repay furlough payments paid to ex-employees that then leave again once the scheme ends?

Jeremy535897

Grumpy_chap said:

@JudithF - I assume your are self-employed sole trader. 
I would interpret that the grants have to be declared in the tax year they were received.
There was another thread where a logical argument was put forward that the grants should be accrued to the following year.  I am not sure I agree with it, but it made sense.
As @Jeremy535897 said - ask your Accountant, but do let us know how this concludes.

I said that because we don't know enough about the business to comment. Are accounts done on an accruals or cash basis, for example? Are they done to 31 March or 5 April? If the accounts are on an accruals basis, and you assume the grant is to help with future costs (which is logical, if you've found the money for past costs), there is some logic for deferring the grant into 2020/21. If it is just going to be used to pay creditors at the year end, it should be brought into 2019/20. SEISS is taxable in the year of receipt, but there is nothing said about when the business grant is taxed.

Galloglass

A few comments
1. HMRC have always had draconian powers. It's not news to those that have dealt with them or been part of the set-up as an insider.
2. If you had someone do the application for you, check if they had professional indemnity insurance in case you need to claim off it.
3. If you did the work yourself, then see a professional and have your case ready. See #2 above about PDI.
4. If after #3 you think you are exposed, then fess up quickly and get a deal. I see a few companies are already proposing to pay it back and dressing it up as positive PR.
5. See #1