More than one in 10 mid-sized businesses found errors in their furlough claims
Mid-sized businesses that have reviewed their initial furlough claim and found it to be incorrect have been urged to go to HMRC to address the problem and lessen any penalties faced.
More than one in 10 (13%) mid-sized businesses that have reviewed their initial furlough claim found it to be incorrect, new research by Grant Thornton has found.
However, that number could be higher, as almost one in five (16%) have still not reviewed their initial claim to ensure it was error-free.
The total value of furlough claims made by mid-sized businesses was £9.49bn as at 31 January 2021, according to data from HMRC.
The furlough scheme has supported employees who were unable to work because of lockdowns and other restrictions caused by Covid-19. It covered up to 80 per cent employees’ salaries, taking pressure off personal finances.
Grant Thornton head of tax dispute resolution David Francis urged those who have found errors in their furlough claim to contact HMRC directly, in order to lessen any potential penalties faced.
“The guidance for the scheme has been updated many times since first issued and the focus for many will have been on speed, due to necessity, which may have impacted compliance. While the majority of claims will have been made in good faith it is inevitable that errors may have been made, however unknowingly, in many applications,” said Francis.
“With HMRC investigations building momentum and the introduction of the new Taxpayer Protection Taskforce, it’s critical that businesses are checking their claims for potential errors and gathering the necessary evidence that demonstrates the financial context and internal discussions around their furlough application.
“The reputational risk around misuse of the scheme could be significant and businesses need to clearly document the review of their claim to demonstrate their active compliance,” he added.
Around 4.7 million people were still on furlough by the end of February, with another 200,000 placed on furlough for the first time that month.