Businesses using the furlough scheme have been urged to “thoroughly check” their claims for inaccuracies before HMRC’s cut-off date to avoid the risk of fines or prosecution.
Accountancy firm Kilsby Williams issued the warning after HMRC sent letters to a growing number of businesses to inform them of potential errors in claims, with a reminder that all claims must be “wholly accurate”.
The firm noted that common errors made when submitting claims include claiming for an employee that was not eligible for the scheme, and using wrong calculations or reference figures when determining furlough pay.
HMRC has now set 20 October 2020 as a deadline for self-declarations, in cases where employers have identified miscalculations.
Any self-declarations made after that date are “potentially subject to penalties and even prosecution in the most severe cases”.
Kilsby Williams is now advising all employers to ensure they retain all copies of written confirmations notifying employees they were to be placed on the scheme, as well as retaining copies of the calculations used for all claims made.
Sadie Leadbetter, payroll manager at Kilsby Williams, said: “It is of vital importance that employers who have received a warning letter from HMRC regarding their CJRS claims take this warning seriously.
“Even if the errors made were completely accidental, businesses could indeed find themselves facing a HMRC enquiry, followed by hefty penalties and even prosecution.”
She added: “This scheme has been a life-line for many firms, and we are urging all affected employers to thorough check back through their claims, or to get in touch with an expert who can provide an audit service and ensure full compliance on your behalf.”