HM Revenue and Customs has sent warnings to over 1,200 companies requesting a refund of unpaid employment taxes as the government begins to recover its pandemic-accumulated debt. The Financial Times, in a report said, the businesses were told their future furlough claims would be blocked unless they paid the overdue income tax and national insurance. Under the temporary dismissal system, the company is required to pay the relevant employee tax and national insurance premiums when making a claim.
The payments mentioned in the issued letter are considered part of the government grant to be returned, and not as an additional cost. HMRC said, “Our priority during the pandemic was to support our customers, but it is still important that the tax system continues to work and help support important services such as the NHS. The majority of employers paid what they owe, but those who failed to meet their employee tax and NIC obligations on CJRS grants must agree to a payment plan to make further claims.”
Businesses finding difficulty paying the debt, can sign up for a manageable plan. Head of Policy for the SME Federation, Craig Beaumont was quoted in a media report as saying, “It's important for small employers to pay the contributions they should pay to HM Revenue and Customs, but we asked HMRC to adopt a 'safe harbour' approach. In particular, we changed the record of furloughs to submit them in a faster timetable. This allows people to correct mistakes and examine and apply for all tax affairs.”
