Rishi Sunak says decision to not extend Furlough was 'difficult'
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Furlough has offered financial support to individuals who may have otherwise lost their job as businesses were forced to close to stop the spread of COVID-19. Under the Coronavirus Job Retention Scheme (CJRS) unveiled in March, people have received 80 percent of their wages up to £2,500 per month. So far, 9.6 million furloughed jobs have been recorded, with 1.2 million employers making a claim.
But there is a new action HMRC is taking regarding furlough, which is important for those who have used the scheme to pay attention to.
HMRC has now stated it will be writing to select individuals who may have claimed too much based on the information it has at hand.
The Department has stated approximately 3,000 employers can expect to be contacted, where the information the government has suggested there could be a mistake.
Claims, for example, could significantly differ from the PAYE information provided to HMRC for the most recent months of the year.
Furlough warning: HMRC to write to people who have used scheme about overpayment (Image: Getty)
An HMRC statement said: "This was an entirely new scheme and many employers were coping with the most difficult circumstances they'd ever faced.
"We appreciate mistakes happen, particularly in these circumstances, including claiming too much.
"We are hoping that they will tell us that they've made a mistake, or call us to discuss if the claim was correct.
"We will not seek out innocent errors and small mistakes for compliance action. We will act, however, against anyone who deliberately sets out to defraud the system or claims money they aren't entitled to."
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There is currently a scheme in place which allows employers a grace period to report errors in their application without fear of penalty.
Employers have 90 days from receiving the CJRS money they are not entitled to, to inform HMRC and then repay the money on time.
The letter employers can expect to receive will clearly lay out the action needed from receipt onwards.
It reads: "Please review your records and your CJRS claim. We do understand that mistakes happen and therefore have ensured it is easy for you to correct your claim should you need to.
"If you voluntarily repay any overpaid CJRS grant, you will not be charged a penalty for the error in your claim."
Furlough warning: What is furlough? (Image: EXPRESS)
For those, however, who do believe their grant was correct and that they met all suitable conditions, they will still need to reach out to HMRC upon receiving the correspondence.
Further information will be enclosed within the letter to provide Britons with additional clarity.
The furlough scheme is set to wind down within the coming months, with important changes taking place before it comes to an end.
This month, for the first time, employers have been required to meet the cost of pension contributions and National Insurance for the employees they placed on the scheme.
Furlough warning: HMRC will be providing a small number with guidance (Image: Getty)
In September, the government support will begin to decrease, and only 70 percent of wages will be met up to £2,187.50 per month.
Finally, in October, the final month of the scheme, government contributions will once again decrease to 60 percent, up to £1,875 per month.
Employers will therefore be required to take on 20 percent of the wage responsibility for anyone they still have on furlough.
While there have been calls from certain groups to extend the furlough scheme beyond the October 2020 end date, the Chancellor has opted not to do so.
Mr Sunak told the BBC: "This has been one of the most difficult decisions I've had to make.
"But if you look at it from the start to the finish of the scheme, the government will have been stepping in to pay people's wages for eight months.
"I think most reasonable people will say, 'Gosh, that's not something that can carry on forever'."
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