HMRC have issued two new Compliance Series Factsheets outlining penalties for grants overpaid under the coronavirus support schemes.
You may review these here:
If a tax payer has made an error in a claim and have received too much, they must pay this back to HMRC. they can either:
- tell HMRC as part of their next online claim; or
- contact HMRC to pay the money back.
If a tax payer has over claimed a grant and have not repaid it, they must notify HMRC by the latest of either:
a. 90 days after the date the grant was received;
b. 90 days after the date they received the grant that they were not longer entitled to keep because the circumstances changed;
c. 20 October 2020.
If a tax payer does not do the above then they may have to pay a penalty. The onus is on the tax payer to inform HMRC of any over payment.
However, if a tax payer has not claimed enough they will still need to make sure that they pay their employees the correct amount.
If a tax payer is looking to increase the amount of the claim, HMRC may need to conduct additional checks.
If HMRC make an assessment to recover a grant for which a tax payer was ineligible or was overpaid, or if HMRC charge a penalty, they will write and explain how they arrived at the decision and the amount of the tax or penalty due. If a tax payer does not agree with the decision or the amount due, they may appeal within 30 days from the date the notification was issued.
When deciding the amount of any penalty, HMRC will take account of whether a tax payer knew that they were not entitled to the grant when they received it, or knew when they had stopped being entitled to it, because of a change of circumstances, and didn’t tell HMRC in the notification period, then the law treats the failure as deliberate and concealed. This means a penalty of up to 100% could be charged on the amount of the overpaid grant that a tax payer was not entitled to receive or keep and had not repaid by the last day of the notification period.
HAMMAD BAIG © 2020
BARRISTER
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.
Hammad practices tax law and regularly challanges tax penalties on behalf of tax payers.
Further articles on topics relating to Hammad's practice areas, can be read under his Insights, and on Hammad’s blog. Should you wish to instruct Hammad, then please do not hesitate to contact his clerk Mark Byrne.