Agencies, are your CJRS claims correct?

When the Government announced the Coronavirus Job Retention Scheme (CJRS) to support businesses continuing to employ their staff even though their premises were closed so that the employees were furloughed, many employers participated in the scheme.?As employers for tax purposes, employment agencies were amongst those employers claiming under the scheme – and quite rightly so as the Government made it clear they were entitled to do so.

The CJRS was announced at pace, with guidance to follow and legislation further subsequent to that.?That guidance and legislation evolved over time with many changes made, not always with much fanfare, with quirks and anomalies developing.

One such quirk is that for agencies claiming CJRS, not only did the furloughed employee need to have been on the agencies books and appeared on a payroll submission to HMRC in the period 6 April 2019 to 19 March 2020, due to the PAYE agency regulations specific to agencies the furloughed employee also must have been paid by the agency at least once in the three months immediately preceding them going on furlough.?This additional clause was only added to the legislation published 22 April 2020, over a month after the scheme was announced and crucially while the guidance had been published four weeks prior to the legislation, this piece specific to agencies was never subsequently added to the guidance.

As the guidance rather than legislation was the main source of information for most employers, as a result it is possible that agencies may have incorrectly claimed CJRS and we understand that there are currently active enquiries being undertaken by HMRC on this point.

It is therefore vital for agencies to check their CJRS claims and make the necessary adjustments as appropriate.?For more guidance on how we can help with these reviews as well as the consequences of making a mistake in claims, please visit https://www.bdo.co.uk/en-gb/insights/tax/employer-essentials/coronavirus-job-retention-scheme