Guidance on CJRS offsets
11 October 2021
Updated HMRC guidance states that where an overclaim has been made in relation to one employee under the Coronavirus Job Retention Scheme (CJRS), this can be offset by an amount which is equal to any other amounts that have been underclaimed for in relation to another employee within the same claim period.
It is important to note, however, that there is not an option to offset an overclaim made in one claim period against an underclaim for another period.
In instances where an underclaim has been made for an employee, the employee will still need to be paid correctly, to ensure that they have received at least 80% of their reference pay, in line with CJRS rules.
If there is still an overclaim figure left once offsets have been calculated, repayment must be made to HMRC accordingly.
The guidance provides an example to put this into practice.
“A Ltd claimed £4,000 for 1 June 2021 to 30 June 2021. This comprised of £2,000 for Employee 1 and £2,000 for Employee 2.
A Ltd reviewed the claim after the amendment deadline and identified that Employee 1 should have received £2,500 and Employee 2 should have received £1,500.
The £500 overclaim for Employee 1 can be offset against the £500 underclaim for Employee 2. This means A Ltd does not have an overclaim for the period from 1 June 2021 to 30 June 2021 as long as they pay Employee 1 the additional £500 they should have received in respect of that period.”
CIPP comment
The CIPP sits on the CJRS forum and, along with other stakeholders, had extended discussions with HMRC relating to the ability to offset overclaims against underclaims. The original stance was that a claim was per employee, per claim period, so claims could not be offset from one employee against another. Due to feedback provided to HMRC at the forum, this stance was changed. If you have any feedback or comments you would like us to raise at the next forum, please contact the policy team, at [email protected].