Coronavirus Job Retention Scheme: Company Tax Return guidance updated
HMRC’s guidance on how to disclose CJRS claims in the CT600 has been clarified – here’s what employers need to do.
HMRC’s guidance on how to disclose CJRS claims in the CT600 has been clarified.
The Company Tax Return, form CT600, was updated in April to include entries on Coronavirus Job Retention Scheme (CJRS) grants received, the employer’s entitlement to those grants, and details of any overclaims repaid or previously disclosed to HMRC. This information is required to calculate any ‘claw back’ income tax charge needed to recover overclaimed CJRS grants, or grants the employer was entitled to claim but ceased to be entitled to retain. HMRC amended their CT600 guidance at the start of September to clarify how these entries should be presented. This article summarises the key changes and outlines steps employers might need to take in response to the revised guidance. More generally, as the CJRS draws to a close, employers should satisfy themselves that all claims filed are supportable.
What are the key clarifications?
HMRC’s revised guidance clarifies that:
- CJRS grants should be disclosed in the CT600 only if they were actually received during the relevant accounting period (rather than be included on the accruals basis);
- If the employer voluntarily repaid, in part or in whole, CJRS grants it was entitled to claim and retain this does not affect the entries in the CT600 (i.e. voluntarily returning a CJRS grant does not reduce the reported grants received or disclosure of the employer’s entitlement); and
- Certain adjustments to reported figures will be required where an overclaim was corrected by reducing a subsequent claim received in the following accounting period.
What should employers do now?
Employers who’ve yet to file a company tax return for an accounting period during which they participated in the CJRS should ensure they follow HMRC’s amended guidance.
Employers who have already filed a company tax return that covers an accounting period during which they participated in the CJRS should confirm whether the disclosures made are in line with the revised guidance.
HMRC have been asked to confirm what steps, if any, employers should take if they’ve already filed a company tax return that disclosed CJRS figures on a different basis (for example, where figures were reported on an accruals basis to agree with the company’s accounts).Whilst HMRC have yet to confirm the position, it is possible that employers who filed on an alternative basis which does not affect the amount of any ‘claw back’ income tax charge due will not be required to submit an amended return.
Employers whose submitted company tax returns do not reflect the revised guidance should therefore await further clarification from HMRC before amending any company tax returns. This has been requested by KPMG, and we will publish an update in due course.
Ensuring CJRS claims are correct
Claims for periods that end during September 2021, the last month for which the CJRS will operate, must be submitted to HMRC on or before 14 October. Any shortfalls subsequently identified in those claims should be corrected before 28 October 2021.
Any overclaims should be reported to HMRC within 90 days of the date on which they arose.
As well as ensuring final claims under the CJRS are correct and submitted on time, employers should confirm that historical claims are supportable based on HMRC’s prevailing guidance at the relevant time.
This is particularly important as, when signing the CT600, the relevant company officer confirms that the entries – including those relating to CJRS grants received and which the employer was entitled to receive and retain – are to the best of their knowledge complete and correct.
HMRC also consider that the CJRS falls within the Senior Accounting Officer regime.