By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs
The taxman could claw back up to 10 per cent of all furlough cash from small businesses unaware they have overclaimed.
HMRC and the National Audit Office estimate between 5 per cent and 10 per cent of the total furlough money claimed could represent overclaims.
The Government is due to have spent over £70bn on furlough once the scheme ends on 30 September, nearly double the total UK defence spend in 2019/19.
>See also: This change to the furlough scheme could lead to more costly redundancies
At its peak 8.9m people were on furlough; the latest figure is 1.9m.
Nigel Morris, employment tax director at MHA, says innocent errors and incorrect claims will be pursued for many years by HMRC. He advises small businesses check their claims in detail, now that furlough is winding down. They should repay any overclaims through the Government’s own website before HMRC hits them with interest and penalties.
The most common administrative slip-up made by companies has been forgetting to work out claims for flexible furlough on calendar days (365 per annum) and have instead used working days (260 per annum), which they might use for