Government launches consultation on HMRC powers to recover payments made under the Coronavirus Job Retention and Self-Employment Income Support schemes

Proposed new legislation will also provide HMRC with powers to charge a penalty where it can demonstrate deliberate non-compliance on the part of the recipient

The government has launched a consultation on HMRC powers to recover payments made under the Coronavirus Job Retention and Self-Employment Income Support schemes.

While the main focus of the consultation is on new legislation designed to ensure that grants made under the schemes are within the scope of tax and included as revenue for income tax and corporation tax purposes, the proposed changes will also provide HMRC with additional compliance and enforcement powers in relation to the Job Retention and Self-Employment schemes.

In a draft explanatory note to the new provisions, the government outlines that they will -

• make clear that HMRC can use its information and inspection powers to check a Job Retention and Self-Employment scheme claim has not been overpaid, and that a Job Retention scheme payment has been used to pay employee costs, PAYE, national insurance contributions and make pension contributions; and
• provide HMRC with powers of recovery where someone has received a payment under the schemes to which they are not fully entitled, or they have not used a Job Retention scheme payment to pay employee costs, PAYE, national insurance contributions and make pension contributions, and to charge a penalty where HMRC can demonstrate deliberate non-compliance.

The deadline for responding to the consultation is 12 June 2020.

For more information, see Draft legislation: Taxation of coronavirus (COVID-19) support payments from gov.uk