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Penalties for not telling HMRC about Coronavirus Job Retention Scheme grant overpayments

Posted 29/07/2020

HMRC won’t charge a penalty if you didn’t know you had been overpaid and if you repaid it within the relevant time period.  Sole traders or partners the relevant time period is 31 January 2022, and for companies it is 12 months from the end of the accounting period.

If you’ve overclaimed a CJRS grant and haven’t repaid it you need to notify HMRC within the notification period, which is the latest of:

  • 90 days after the date you received the grant you were not entitled to
  • 90 days after the date you received the grant that you were not longer entitled to keep because your circumstances changed
  • 20 October 2020

HMRC may recover the overpaid grant by making a tax assessment. Payment of the amount assessed is due 30 days after the assessment and interest is charged on late payments. Furthermore, late payment penalties may also be charged if payment is not made within 31 days of the due date.

If HMRC haven’t made an assessment, you must include the overpayment on your Corporation tax return or on your 2020/21 Self Assessment tax return.

HMRC may charge a penalty if you don’t notify them within the notification period that you’re chargeable to income tax on an overclaimed CJRS grant. The level of the penalty depends on the factors at hand, including whether you knew you were entitled to the grant or knew when it became repayable or chargeable to tax because your circumstances changed; in such cases the law treats your failure as deliberate and concealed and a penalty of up to 100% of the overpayment could be charged.

For Government Guidance, please see:

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