Information about the new 31 July deadline
Legislation and guidance
18. On 20 March 2020, the Chancellor of the Exchequer (the Chancellor) announced the creation of the CJRS in response to the coronavirus pandemic. A Treasury direction was subsequently issued dated 15 April.
19. The purpose of the CJRS was to provide payments to employers which covered 80 per cent of a business’ usual monthly wage costs up to £2,500 per month, in addition to associated employer national insurance and pension contributions for each furloughed employee.
20. HMRC guidance dated 26 March 2020, published on the gov.uk website, provided details of the scheme and said it would be: · up and running from the end of April · a temporary scheme open to all UK employees for at least three months, starting from 1 March
21. At this time there were no deadlines for submitting claims.
22. On 12 May 2020, the Chancellor announced the CJRS would be extended until the end of October. They also said there would be changes to the scheme from 1 August and advised further details would be available at the end of May.
23. HMRC issued new guidance on 29 May which said: · the scheme will close to new entrants from 30 June · employers will have until 31 July to make any claims for the period before 30 June.
24. Further HMRC guidance was issued on 12 June and 26 June which repeated the information regarding the deadline for claims.
25. A further Treasury direction, dated 25 June 2020, confirmed the new deadline of 31 July for claims from 1 March to 30 June.
26. The Parliamentary and Health Service Ombudsman’s principles of good administration say public organisations should: · plan carefully when introducing new policies and procedures · ensure policies and procedures should be clear and there must be accurate, complete and understandable information about the service · aim to ensure that customers are clear about their entitlements… their own responsibilities · communicate effectively.
Mr R’s evidence
27. Mr R says the Company did not submit CJRS claims regularly on the same date every month and submitted claims after it had paid staff their wages. He says it was simpler to do this due to the number of staff. He also thought it better because the claims were more likely to be accurate and avoided having to get estimated claims amended.
28. He says the Company’s HR manager successfully claimed twice prior to the end of July. However, when they tried to submit a claim on 28 August 2020 for the period 7 June to 4 July, the online portal had been reconfigured and required the claimant to select the month the claim related to. The earliest option was July.
29. He says the webchat said the HR manager had missed the deadline of 31 July for claims up to 30 June. When the HR manager called HMRC on 1 September 2020, HMRC said they were too late to claim for any part of June.
Availability of guidance
30. Mr R believes the HMRC guidance, issued on 29 May, was not enough to inform companies of the new deadline. He says it was not reasonable to expect employers to check lengthy guidance in order to make themselves aware of the change in requirements. He says this is because: · there was no indication any such deadline was imminent · it was several months after the introduction of the scheme and there had been no previous deadlines, so all claims had been accepted regardless of the date of submission
31. He says the Company closely monitored the government’s announcements about the CJRS and related media coverage, but it was entirely unaware of the 31 July deadline until HMRC told them on 28 August. He believes the HR manager checked the gov.uk website at the beginning of the scheme. Mr R does not think the responsibility should be on the Company to continue to monitor the website, particularly given the challenges employers were already experiencing keeping their businesses stable.
32. He refers to HMRC guidance issued in December which advised on missed claim deadlines. He thinks this should have been issued sooner. He thinks it is evidence HMRC realised their previous guidance was not sufficient and it needed to take action to reduce the number of complaints it was likely to get from people who did not know about the 31 July deadline.
Email
33. Mr R says it was not enough just to put guidance on a website about such an important change as the new 31 July deadline. He says it was reasonable for employers to assume HMRC would contact them individually to make them aware of any forthcoming significant changes since it already had their email addresses linked to previous claims. He believes it was wrong of HMRC not to do this.
Evidence from HMRC
Availability of guidance
34. We asked HMRC what steps it took to communicate the 31 July deadline to its customers. It told us between 29 May and 31 July multiple webinar dates were available for employers each week and these were promoted through gov.uk and social media. These webinars highlighted the upcoming changes, including deadlines and actions for employers.
35. It also said weekly social media posts highlighted the changes to the scheme that would affect employers and signposted customers to the gov.uk guidance pages and webinars which covered this deadline. Posts which specifically referenced the 31 July deadline during this period were issued on 10 June, 1 July, and 29 July 2020.
36. HMRC also said: · following publication of the Treasury direction on 26 June 2020, guidance was published on gov.uk on the same date and there was widespread media coverage · pop out boxes were displayed at the top of CJRS gov.uk pages for all deadlines · it evaluated its channels and awareness levels of the scheme and changes to it, which remained extremely high.
Email
37. We asked HMRC if it had considered emailing customers and if not, why this had not been possible. It told us it had issued six employer emails and one Employer Bulletin to 2.2 million subscribed employers and 100 thousand agents between 29 May and 29 July. Each of these contained key messages about the deadline and signposted the customer to gov.uk guidance for further information.
38. HMRC say it was up to the employer to decide whether to opt in to receiving emails and notifications but says for customers not signed up, it also cascaded these updates to key stakeholders to share with their members.
39. Mr R has since confirmed the Company was not subscribed to employer emails and bulletins from HMRC. He says his HR manager cannot recall whether during the process of submitting CJRS claims, HMRC asked them whether the Company wished to opt in but believes they would have accepted it if it had been offered. Mr R believes it looks unlikely HMRC made any effort to sign up employers submitting CJRS claims who were not previously subscribed.
40. Finally, given CJRS was an emergency funding scheme, HMRC said:
· it believes it reasonable to expect employers ‘to stay on the ball, particularly as lockdown was beginning to be eased so changes in the scheme were inevitable’ · it would also expect claims to be considered ‘in near real time rather than months after the event’
Our conclusions
Responsibility of the Company
41. Mr R says the Company were not responsible for keeping up with changes in legislation relating to CJRS claims. HMRC dispute this is the case.
42. There were numerous changes in guidance to CJRS after the Chancellor’s initial announcement on 20 March and the initial Treasury direction to HMRC on 15 April prior to and after 31 July, up until the scheme ended on 30 September 2021. These included: · the Chancellor’s announcement on 17 April that the scheme would run to 30 June rather than 31 May · further guidance regarding holiday entitlement and the possible requirement to take holiday on 14 May · the announcement that from 1 July furloughed employees would be able to return to work part time · the Chancellor’s announcement on 8 July that they intended to give UK businesses a bonus for every employee bought back from the furlough scheme
43. While we fully acknowledge this was an extremely stressful time for Mr R, we would expect the Company to make reasonable efforts to stay informed of changes to the CJRS requirements. This is because: · the introduction of CJRS was a completely new type of emergency support for employers and employees in the context of exceptional circumstances and therefore something completely unfamiliar to the Company’s administrative staff · the regular announcements and changes in guidance and legislation indicate a changing picture which was constantly under review and likely to change often.
Availability of guidance and support
44. While accepting the Company’s responsibility to keep up with developments in CJRS administration, we have also looked at whether HMRC provided enough guidance and support.
45. HMRC has provided detailed evidence of the steps taken to notify its customers of the 31 July deadline. We can see no indication this was not enough. This is because it: · issued guidance and details of the new deadline at regular intervals between 29 May and 31 July · ensured the information about the new deadline was highlighted and easily accessible · used a variety of communication methods to ensure the information was made available to as many customers as possible.
46. We are sorry the Company did not subscribe to HMRC’s employer emails and bulletins and did not know this was available, but we cannot say HMRC is responsible for this happening. We consider the Company had a reasonable opportunity to access this service either during or before the pandemic. This is because: · information about the HMRC employer bulletins and how to register for HMRC’s employer email alert service is available on gov.uk · the bulletins are published six times a year and have been available to employers since 2014 · HMRC also sent the same emails to key stakeholders in an effort to reach customers who had not subscribed to emails.
47. Given the Chancellor’s announcement on 12 May, regarding upcoming changes and other media coverage at this time, it is unfortunate the Company did not know about the new deadline in time to successfully submit its CJRS claim. We are sorry this happened.
48. We see it was incredibly stressful and frustrating particularly since previous claims had been successful. However, for the reasons we have explained above, there is nothing to suggest HMRC did not make reasonable attempts to make the Company aware of the new deadline.
49. We acknowledge Mr R’s frustration the deadline was not part of the initial requirements but introduced several months into the scheme. We have explained how HMRC made timely and frequent announcements about the change before it took place. We cannot hold it responsible for the timing of changes in regulation made by the government.
50. Mr R refers to HMRC guidance issued in December. We have not looked because we have not seen any suggestion that guidance available before the introduction of the new deadline was not sufficient.
Late claim in November
Legislation and guidance
51. A Treasury direction dated 13 November contained the regulations for amending claims up to the end of November 2020. HMRC guidance dated 19 November advised employers to contact HMRC before or on 30 November to amend a claim for the period ending on or before 31 October 2020. It explained subsequent amendments for claims relating to periods after 1 November would only be accepted within 28 days of the month to which the claim related.
52. Internal HMRC guidance said: · if customers had made an error in their claim which resulted in them receiving too little money, they should contact HMRC to amend their claim · for claims relating to periods after 1 November 2020, they will only be able to increase the amount of their claim if they amend the claim within 28 calendar days after the month.
Mr R’s evidence
53. Mr R says HMRC accepted a late claim on 30 November 2020. This was to do with an earlier claim submitted for the period ending 11 April, totalling £111.66.
54. He says this was technically a late claim which was backdated from a period more than six months previously. He does not understand why his late claim submitted on 28 August for a period in June could not be treated in the same way for a shorter backdated period.
Evidence from HMRC
55. HMRC confirm Mr R submitted an underclaim in respect of his earlier claim in April which had otherwise been paid. It says it made an adjustment to the initial claim submitted for the period 24 March to 9 May and paid him the value of the underclaim. It has provided a screenshot confirming the Company contacted HMRC about the underclaim on 30 November and its processing of the amendment to the initial claim on the same date.
56. HMRC says an underclaim is not the same as a new claim and the same legislation does not therefore apply to both. It says the Company’s claim on 28 August was a completely new claim which could not be submitted after 31 July because of the changes in legislation.
Our conclusions
57. We consider HMRC’s explanation which distinguishes between the underclaim payment and its refusal to pay the Company’s CJRS submission dated 28 August is correct. This is because: · in this case the payment resulted from an amendment of a previous claim which had already been paid · the Company’s request for the underclaim was made within the required deadline in line with HMRC guidance · the Company’s CJRS claim dated 28 August was a completely new claim and was not submitted within the required time as explained above.
58. There is no indication anything has gone wrong here, and we will not take any further action on this part of the complaint.
HMRC’s refusal to pay the entire claim
Legislation and guidance
59. HMRC guidance said where a customer has paid employees in advance of claiming, they could only claim a CJRS grant where it had made a PAYE Real Time Information (RTI) submission to HMRC, notifying a payment of earnings for that employee. Alternatively, where a customer intended to use the grant to directly pay an employee, it should also be reported to HMRC via RTI. HMRC provided amended guidance in respect of the deadlines for providing RTI during the lifetime of the scheme.
60. HMRC introduced a discretion policy for CJRS in May 2020. Discretion applied to situations where a customer had not been able to submit RTI by the date specified in the relevant Treasury direction, either due to HMRC error or exceptional circumstance. The policy did not apply to situations where the customer has provided RTI by the relevant date but was not eligible to claim because they did not submit a CJRS claim by the relevant deadline.
Mr R’s evidence
61. Mr R says if someone is due a tax refund from HMRC but late in filing their tax return, HMRC may fine them but likely would not refuse to pay the refund. He feels it is harsh of HMRC to refuse to pay him what he would have otherwise been due, given the circumstances and the size of the financial loss. He says a fine or penalty would be far more appropriate.
62. He says the Company submitted claims under the ‘eat out to help out scheme’. These were audited by HMRC and the Company ‘got a clean bill of health’. He says this illustrates the values of the Company and indicates it had no intention to commit any type of fraud.
Evidence from HMRC
63. HMRC said it did not apply its discretion policy here because the policy did not apply to late or adjusted claims.
Our conclusions
64. We have said HMRC found the Company’s claim dated 28 August ineligible, in line with its guidance. We have also said why Mr R’s circumstances did not trigger the discretion policy. There is no suggestion from the available evidence that HMRC could have treated the late claim in any other way.
65. The government created the legislation to support CJRS urgently to address the unprecedented circumstances of the time. The strict regulatory requirements and limited discretion were created in part to counter the obvious potential for fraudulent claims.
66. We understand Mr R wanting to make clear his Company had no intent to defraud HMRC. We also acknowledge his immense frustration at the loss of a considerable amount of money due to a late claim, when he believed the Company was complying with the scheme to the best of its ability. However, our role is to investigate claimed maladministration (fault) on the part of HMRC. We cannot challenge government legislation. We do not consider the evidence indicates any failings on the part of HMRC and cannot take any further action.
67. While we have not found any indications of failings, we hope our consideration of what has happened helps to explain HMRC’s actions.