Coronavirus: Pay Job Retention Scheme grants back

News article

Find out how to pay all or some of your grant back, make a voluntary repayment or what you need to do if you have not paid your staff enough after claiming the grant

The Coronavirus Job Retention Scheme closed on 30 September 2021.

You must get a payment reference number and pay HM Revenue & Customs (HMRC) back within 30 days, if you:

  • have claimed too much through the Coronavirus Job Retention Scheme
  • would like to make a voluntary repayment (because you do not want or need the grant to pay your employees’ wages, tax and National Insurance and pension contributions)

How to pay

You must use the online service to get your payment reference number before you can pay HMRC back. You should only do this if you’re not making another claim.

Your payment may be delayed if you use the wrong reference number.

Pay by online or telephone banking, CHAPS and Bacs

You can pay by Faster Payments, CHAPS or Bacs to HMRC’s account.

Sort code Account number Account name
08 32 10 12001039 HMRC Cumbernauld


Payments by:

  • Faster Payments (online or telephone banking) usually reach HMRC on the same or next day, including weekends and bank holidays
  • CHAPS usually reach HMRC the same working day if you pay within your bank’s processing times
  • Bacs usually take 3 working days

Pay by card

You can also pay by debit card or corporate credit card.

If you’ve overclaimed

If you’ve overclaimed a grant and have not repaid it, you must notify HMRC by the latest of (one of the following):

  • 90 days after the date you received the grant you were not entitled to
  • 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed
  • 20 October 2020

If you do not do this, you may have to pay a penalty. If you do repay any overclaimed grant, this will prevent any potential tax liability in respect of the overpayment of Coronavirus Job Retention Scheme. HMRC will not be actively looking for innocent errors in their compliance approach.

Find out more about when you may have to pay a penalty and other information, including:

  • how HMRC decides how much the penalty will be
  • when HMRC will not charge a penalty
  • how to appeal against a penalty

If you need more time to work out what you owe

You can tell HMRC that you think you have overclaimed.

This will let HMRC know that you:

  • may have claimed too much
  • will pay the money back when you’ve worked out what you owe

You’ll need your:

  • Employer PAYE reference number
  • Corporation Tax Unique Taxpayer Reference number
  • Self Assessment Unique Taxpayer Reference number (if you’re not registered for Corporation Tax)

You must tell HMRC the amount you owe as soon as you reasonably can and pay them back. This must be within 30 days of receiving a payment reference number.

If HMRC find that you have not done this, you may have to pay back all or part of the grant and pay a penalty. The penalty charge could be as much as the amount of grant you were not entitled to receive or keep.

If you’ve not paid your employees enough

If you’ve claimed the grant you must have paid your employees the lower of either:

  • 80% of their wages for the hours they did not work
  • a rate of £2,500 (or the equivalent where the claim period is not a month) for the hours they did not work

If you did not pay your employees enough across all claim periods, you must either:

  • top up their wages to the required level
  • pay the grant back

How long you have to top up wages

You must top up wages within a ‘reasonable period’. This period is usually no later than:

  • 31 January 2022 for payments received in the 2020 to 2021 tax year, for customers who file an Income Tax Self-Assessment return
  • 31 January 2023 for payments received in the 2021 to 2022 tax year, for customers who file an Income Tax Self-Assessment return
  • 12 months after the end of the relevant accounting period if you file a Company Tax return

HMRC may decide on a shorter or (in exceptional cases) longer period, depending on your specific circumstances.

If HMRC contact you about an error in your claim, they’ll tell you when this needs to be corrected by. If errors are not corrected by the date HMRC give you, you may need to repay the grant and pay a penalty.

If you find an error when filing your tax return

You need to make good any underpayment of wages to employees within 2 months of the statutory filing date of the return.

Where you have provided provisional figures in your return, you must provide final figures as soon as you reasonably can. You will have up to 2 months from the date that final figures are provided to make good wages to employees.

Example

Company A’s Company Tax Return is due on 31 December 2021.

As part of an internal audit in December 2021, Company A identifies errors in its payments of wages to employees.

HMRC would expect Company A to accurately reflect the errors in its return submitted on 31 December 2021 and make good the wage shortfall by 28 February 2022. If Company A does not make good the wage shortfall, it may need to repay the grant and pay a penalty.

Offset an amount you’ve overclaimed

When working out the amount you’ve overclaimed for in a claim period, you can include all employees in that single claim period.

This means if you’ve overclaimed for one employee, you can offset this by an amount, equal to any amounts that you’ve underclaimed for another employee included in the same claim period. You cannot offset an overclaim made in one claim period against an underclaim from another claim period.

You can only do this from 11 October 2021 for:

  • claims and amendments for September 2021
  • late claims and amendments where you have a ‘reasonable excuse’
  • disclosures of overclaims for any claims period

HMRC will not:

  • allow any amendments to past disclosures
  • re-open any assessments based on the guidance in place at the time

If you had already offset claims between employees in the same claim period before 11 October, HMRC will not try to recover any overclaimed amount in respect of offsetting for those claims and you do not need to amend the claim.

Where you have underpaid any individual employees, you must make that value good to those employees. This is because it is a requirement of the Coronavirus Job Retention Scheme that the employee receives a minimum of 80% of reference pay across all claim periods, otherwise you may need to pay the grant back.

You must repay any overclaim after offsets for any period to HMRC.

Example of offsetting an amount you’ve overclaimed

A Ltd claimed £3,000 for 1 September 2021 to 30 September 2021. This consisted of £1,200 for Employee 1 and £1,800 for Employee 2.

A Ltd reviewed the claim after the amendment deadline and identified that Employee 1 should have received £1,800 and Employee 2 should have received £1,500.

£300 of the £600 underclaim for Employee 1 can be offset against the £300 overclaim for Employee 2. This gives A Ltd a net overpayment of £0. The remaining £300 underclaimed for Employee 1 cannot be offset against the overclaim for Employee 2 because this would result in a net overclaim below £0.

This means A Ltd does not have an overclaim for the period from 1 September 2021 to 30 September 2021.

A Ltd has also underpaid Employee 1 by £600 in September 2021. However, A Ltd have overpaid Employee 1 a total of £300 across the previous claim periods. This means that A Ltd now only needs to pay Employee 1 an additional £300 to make good their wages up to September 2021, as this makes £600 in total.

First published 11 November 2020