The Government has implemented the Coronavirus Job Retention Scheme (CJRS) claim process to allow employers to claim quickly with very few checks before HMRC make a payment to you.

HMRC have said that they will audit claims in the future and will recover any overpayments plus interest and penalties and criminal proceedings may be taken if needed. So, it is important that you understand your obligations and keep proper records.

When they review claims, HMRC will be looking not just at payroll and financial records but also phone, social media and e-mail activity, interviewing current and former employees and potentially even clients. It is much easier to check that this information is available now than trying to recreate it when HMRC carry out audits which could be several years in the future.

What Records Do I Need To Keep?

You need to demonstrate to HMRC that your workers are being furloughed specifically due to the impact of Corona virus and keep records of how you selected those employees. Equality and discrimination laws apply in the usual way and you should select who to furlough fairly based on your work requirements and be able to justify how you have done this. You also need to demonstrate that:

  • The worker has been instructed to cease all work in relation to their employment (HMRC have stated that furlough letters need to be kept for 5 years)
  • The employer and worker have agreed in writing (which may be in an electronic form such as an email) that the worker will cease all work in relation to their employment including for any associated and connected employments
  • The number of days each worker has been furloughed
  • How you have calculated the claim you have made to the CJRS

When Should I Claim?

HMRC have said that you can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll. You can only claim once per claim period and currently you cannot make corrections, although guidance released on 23rd April confirms that HMRC are looking to develop a process to allow for amendments.