HMRC has added a new section to its coronavirus job retention scheme guidance setting out how businesses should top up employees’ wages where they claimed a grant but did not pass on the full benefit.
The new section If you’ve not paid your employees enough confirms that, for each claim period where businesses have claimed a grant, they must have paid their employees the lower of either:
80% of their wages for the hours they did not work; or
a rate of £2,500 for the hours they did not work.
Businesses which have not paid employees enough must either:
top up their wages to the required level; or
pay the grant back.
Businesses must top up wages within a ‘reasonable period’. The guidance notes that this period is usually no later than the relevant tax return filing deadline for the tax year in question:
income tax self-assessment tax returns: 31 January 2022 for payments received in the 2020/21 tax year, and 31 January 2023 for payments received in the 2021/22 tax year; and
company tax returns (CT600): 12 months after the end of the relevant accounting period.
HMRC also notes that, where reasonable provisional figures have been used in a return, additional time will be allowed to make up a wage shortfall.
The guidance also includes further clarification on offsetting overclaimed amounts against underclaims for other employees in the same claim period.
HMRC has added a new section to its coronavirus job retention scheme guidance setting out how businesses should top up employees’ wages where they claimed a grant but did not pass on the full benefit.
The new section If you’ve not paid your employees enough confirms that, for each claim period where businesses have claimed a grant, they must have paid their employees the lower of either:
80% of their wages for the hours they did not work; or
a rate of £2,500 for the hours they did not work.
Businesses which have not paid employees enough must either:
top up their wages to the required level; or
pay the grant back.
Businesses must top up wages within a ‘reasonable period’. The guidance notes that this period is usually no later than the relevant tax return filing deadline for the tax year in question:
income tax self-assessment tax returns: 31 January 2022 for payments received in the 2020/21 tax year, and 31 January 2023 for payments received in the 2021/22 tax year; and
company tax returns (CT600): 12 months after the end of the relevant accounting period.
HMRC also notes that, where reasonable provisional figures have been used in a return, additional time will be allowed to make up a wage shortfall.
The guidance also includes further clarification on offsetting overclaimed amounts against underclaims for other employees in the same claim period.
