Taxing excess Covid-19 support payments

HMRC paid £7.8bn to 2.7m individuals under the self-employment income support scheme (SEISS) by 19 July 2020. By 16 August 2020 HMRC paid £35.4bn to approximately 1.2m employers under the coronavirus job retention scheme (CJRS) as a result of 9.6m employees being furloughed. Covid-19 support payments (CSPs) were also made under coronavirus statutory sick pay rebate scheme and other grant schemes. HMRC is keen to recoup any support payments which recipients were not entitled to receive or retain. Consequently FA 2020 s 106 and Sch 16 enables HMRC to tax CSPs to which recipients were entitled (‘legitimate CSPs’) and creates a mechanism empowering HMRC to clawback excessive CSPs in relation to the CJRS and SEISS.

This article primarily explores how HMRC is able to...