Warning over furlough scheme ‘errors’
Small retail businesses are warned they could have to pay thousands back to HMRC for making errors on applications for the Government’s furlough scheme, according to an accountancy journal.
A report in Accountancy Today says that many small business applications includes the cost of their Employer’s National Insurance Contributions (NICs) for furloughed employees. However, for many small businesses that cost is already being covered by the Government.
Under the existing Employment Allowance, businesses that pay less than £100,000 in NICs each year can apply for up to £4,000 of tax relief on that bill. This relief is used by many micro-businesses to reduce their National Insurance bills to zero.
The report, which follows research by accountancy form UHY Hacker Young, said that those who overclaim by mistake will have to pay that money back to HMRC later; an unexpected cost that they are unlikely to have budgeted for.
BAGMA and Bira are calling for HMRC to update the application process to include reminders for NI figures to ensure accurate claims.
Andrew Goodacre, Bira’s CEO, said: “We have given credit to HMRC for developing the portal on time and readily available to businesses.
“It is obviously very important that the independent retail businesses using the furlough scheme (and it is several thousand) make valid and accurate claims.
“Genuine errors will be made I would like HMRC to add an extra question/ reminder for NI contributions to ensure the business is submitting the correct figures.”
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