18. In discussing the complaint with Mr R, and in reviewing the documentation available to us, we understand there are several issues he raised with HMRC. To provide a clear decision, we will review each of those issues separately. Where issues are similar in nature, or closely related, we will address them collectively.
Mr R says HMRC’s BPT system, which employers use to submit payroll information to HMRC, was not functioning correctly in January 2020. As a result, Mr R tells us he was unable to submit FPS to HMRC by the 19 March 2020 deadline. Mr R says he should not be penalised as a result
19. Mr R tells us that due to a technical problem with the BPT system in January 2020, he was unable to submit accurate FPS information to HMRC before the 19 March 2020 deadline. He says he notified HMRC of this problem before the deadline date and therefore feels it unfairly penalised him for something which was beyond his control.
20. HMRC says it looked at its records but could find no evidence Mr R attempted to contact it about the problems he was having with its BPT system. During its own investigation, we understand the Adjudicator’s Office reached the same conclusion as it could find no evidence to support Mr R’s account about his contact with HMRC.
21. It said if Mr R was experiencing problems with its BPT system, it would have expected him to contact its Employer Helpline or its Online Service Helpdesk. It added that if the Online Service Helpdesk had been contacted, it would check the figures with either the Employer Helpline or its online tax calculators. Then, if the figures proved to be wrong, it would escalate this to its ‘Tier 2 Technical Support team’ who would further investigate what was causing the BPT to display the incorrect FPS figures.
22. Ultimately, both HMRC and the Adjudicator’s Office were not convinced, on balance, that Mr R had called HMRC to report the issues with his BPT system before the deadline date. They could find no evidence of a call, including a technical reference number, which would have been generated if such a call had been made. Likewise, they noted ‘…99.9% of BPT issues are due to user error’, so their view appears to be that the issue Mr R described with the BPT system was most likely caused by user error, rather than a systemic problem with the software itself. In addition, had he called before the deadline, such problems could have been fixed before it expired.
23. As a result, HMRC and the Adjudicator’s Office did not uphold this aspect of Mr R’s complaint as they could not see that a BPT error caused him to miss the 19 March 2020 deadline.
24. In looking at HMRC’s guidance Make a late Coronavirus Job Retention Scheme claim, we see there was provision for HMRC to consider extenuating circumstances which may have prevented someone from making a claim before the deadline, or where HMRC’s actions may have prevented important information from being submitted in support of a CJRS application.
25. While this guidance only appears to have come into effect on 29 October 2021, it is reasonable to expect that if there were extenuating circumstances before this date, HMRC could still take this into consideration. This HMRC guidance lists a number of ‘Reasonable excuse examples’, among them are:
‘A HMRC error prevented you from making your claim’
26. On face value, this criterion could apply to Mr R as he says the BPT system error prevented him from submitting correct FPS information before the March 2020 deadline, which in turn invalidated his CJRS application.
27. In discussing this in more detail with Mr R, he says he did contact HMRC to report the issue with BPT before the March 2020 deadline. While Mr R does not have a log reference or any correspondence from HMRC to support this, he did provide us with a letter he sent to HMRC. This was a response to an earlier letter he had received from it regarding problems with his tax account. Mr R says his letter shows he was in contact with HMRC about the problems he was having and should allow us, on balance of probabilities, to determine he did notify HMRC of the BPT issues he was having prior to the deadline expiring.
28. Mr R’s letter is undated, but it appears to be in reply to a letter he received from HMRC dated 16 July 2020, so it cannot pre-date this.
29. On review of Mr R’s letter, we do not see it provides evidence to support his account about contact with HMRC, concerning the BPT issues, prior to the March 2020 deadline. While we have not seen a copy of the July HMRC letter, it is considerably outside of the period we are looking into and therefore will have no impact on this element of Mr R’s complaint.
30. If the BPT issues were reported to HMRC, it would need to fix them before the deadline expired, and if it could not, there would then be justification for considering whether HMRC’s error ultimately prevented Mr R from being able to effectively apply for CJRS.
31. Having carefully considered the available evidence, we do not see we can, on balance, say Mr R did contact HMRC to raise awareness of the problems he was having with the BPT system before the March 2020 deadline expired.
32. In light of the above, we see no indications of maladministration in how HMRC handled this aspect of Mr R’s CJRS application. We see it acted in line with our Principles of Good Administration which says, ‘Public bodies should aim to ensure that customers are clear about their entitlements; about what they can and cannot expect from the public body; and about their own responsibilities.’
33. Mr R also says he made an EPS submission in January 2020, which covered the months leading up to and beyond January 2020, and this was provided before the March 2020 deadline date. He says this should allow us, on balance of probabilities, to determine that because he made his EPS submission on time, it supported his account he had also tried to submit the FPS information too but could not because of the technical issues he experienced.
34. While we note this point does not appear to have been addressed by HMRC during the complaints process, we feel it is proportionate for us to consider it and provide Mr R with our view in this matter.
35. We do not see that Mr R’s submission of EPS information to HMRC supports his account about the issues he experienced in submitting FPS information. Ultimately, EPS and FPS are separate elements within the RTI submission process, and it does not follow that because one is submitted that this represents evidence of problems in submitting the other. Both HMRC and the Adjudicator’s Office found no evidence to indicate the FPS problems were reported at the time, and we have seen no evidence to support this either.
36. As such, we are satisfied HMRC appropriately handled Mr R’s account in line with Our Principles and there are no indications of maladministration.
37. We have therefore decided to take no further action in this aspect of Mr R’s complaint.
While Mr R was not able to submit FPS to HMRC by the 19 March 2020 deadline, he says he did submit EPS for the 2019-2020 tax year, which is part of the RTI system. Mr R says because EPS was submitted before the March 2020 deadline, he should be eligible for CJRS support
38. Mr R tells us his CJRS application was declined by HMRC because it could not see he submitted his RTI information before the 19 March 2020 deadline.
39. Mr R says he may not have submitted FPS information before this deadline, but he did submit EPS information. He tells us an EPS submission is ‘technically’ an RTI submission, and it is therefore unreasonable for HMRC to have declined his CJRS application.
40. We note the Adjudicator’s Office picked up on this point and took the view that in order to be eligible for CJRS, both EPS and FPS (as part of the RTI submission) needed to have been submitted before the 19 March 2020 deadline.
41. In looking in more detail at the deadline, and what is required to qualify for CJRS, we note that Section 76 of the Coronavirus Act 2020 says that HMRC ‘are to have such functions as the Treasury may direct in relation to coronavirus or coronavirus disease’. This means that, in relation to COVID-19, HMRC is directed to act by the Treasury and must therefore act in line with that direction.
42. The first Treasury Direction, The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction was published on 15 April 2020. The Direction has been amended since, as and when the scheme was extended or altered.
43. Paragraph 3.2 of the original direction says an employer may make a claim for a payment under CJRS if the employer has a pay as you earn (PAYE) scheme registered on HMRC’s RTI system for PAYE, on 19 March 2020.
44. Paragraph 5(a)(i) says the cost of employment, in respect of which an employer can make a claim under the CJRS, must ‘relate to an employee whom the employer made a payment of earnings in the tax year 2019-20 which is shown in a return under Schedule A1 to the PAYE Regulations that is made on or before a day that is a relevant CJRS day’.
45. The Treasury Direction sets out that the relevant CJRS day was 28 February 2020 or 19 March 2020. This means for Mr R to have qualified for a grant under the CJRS, the RTI submission needed to have been made before 19 March 2020 at the latest.
46. While we can see the deadline HMRC worked to was correct, and clearly set out in legislation, we take Mr R’s point that legislation, and HMRC’s responses on the matter essentially refer to an ‘RTI payment submission’, rather than stipulating whether both EPS and FPS need to have been submitted as part of it, or whether one or the other would qualify.
47. We see HMRC’s Running payroll guidance states:
‘Send an EPS instead of an FPS if you’ve not paid any employees in a tax month.’
48. We note the Adjudicator’s Office also referred to this piece of guidance in its report but did not see it applied to Mr R. This was because he needed to submit both FPS and EPS information but did not submit FPS information in time.
49. Having carefully considered this point, we do not see it is indicative of maladministration for HMRC to have declined Mr R’s CJRS application due to a late submission of FPS.
50. HMRC’s internal tax manual PAYE5025 - Background: real time information (RTI): submission types says FPS is the main RTI electronic submission an employer completes and submits each time they pay their employees. It also says:
‘An Employer Payment Summary (EPS) will include data to enable HMRC to make deductions from the employer’s liability calculated from the data submitted using FPS.’
51. Alongside this, HMRC’s guidance What happens if you do not report payroll information on time provides more clarity around what is typically expected as part of a PAYE RTI submission, and what penalties can be applied if both FPS and EPS information is not supplied. It says: ‘You can get a penalty if: · your Full Payment Submission (FPS) was late · you did not send: · the expected number of FPSs · an Employer Payment Summary (EPS) when you did not pay any employees in a tax month’
52. When considering CJRS applications, we see it is reasonable for HMRC to view an RTI submission as comprising of both FPS and EPS together. This is because one will inform the other and it is therefore essential that both are submitted before the stipulated deadline as this will afford HMRC with the information it needs to accurately assess an individual’s eligibility for CJRS.
53. We therefore see no indications of maladministration in HMRC’s consideration of Mr R’s CJRS application. Its actions appear to be in line with its obligations under The Coronavirus Act 2020, alongside its internal tax manual and payroll guidance.
54. We have decided to take no further action in this part of Mr R’s complaint.
Mr R says there was a lack of clear information about CJRS’s qualifying criteria in early 2020. He says had he known about the 19 March 2020 deadline, he would have ensured all relevant RTI information was submitted by this date
55. Mr R is frustrated that there was no clear information available to him in early 2020 about the qualifying criteria for CJRS, or when the deadline was for RTI submissions. He says he would have ensured all required information was submitted to HMRC by the 19 March 2020 deadline, had he known about this date in advance.
56. Both HMRC and the Adjudicator’s Office took the view that the developing severity of the pandemic in early 2020 meant detailed information was not immediately available, but this was a symptom of the fast pace of events and information was being introduced ‘at speed’. It added that the CJRS deadline itself and the qualifying criteria was set down by the Treasury and it had no control over when those rules, or any further clarity to them, was introduced.
57. As described earlier in our statement, The Coronavirus Act 2020 set out the CJRS deadline and its qualifying criteria. This was set down by the Treasury on 15 April 2020 and led to updated guidance being issued by HMRC in response later that same month. This updated guidance gave more detail on the qualifying criteria and the deadline by which RTI information needed to have been submitted by.
58. While we appreciate Mr R’s concerns and we have no doubt this led to some distress and frustration, we cannot see any indication of maladministration by HMRC.
59. Guidance interprets legislation, and for this reason it is not reasonable to expect HMRC to have provided further detail on CJRS until it was set down in legislation by the Treasury first. Once this happened, we see HMRC appropriately updated its guidance to reflect the Treasury’s direction and continued to do so, as CJRS was extended throughout 2020 and 2021.
60. We therefore see HMRC acted in line with our Principles of Good Administration which says: ‘All public bodies must comply with the law and have regard for the rights of those concerned. They should act according to their statutory powers and duties and any other rules governing the service they provide. They should follow their own policy and procedural guidance, whether published or internal.’
61. Considering the above, we have decided to take no further action on Mr R’s complaint.