TC09605 - [2025] UKFTT 00957 (TC)

Sections 71 and 76 of the Coronavirus Act 2020 provided the Treasury with the power to direct HMRC’s functions in relation to coronavirus.

The Treasury made a number of Directions regarding the Coronavirus Job Retention Scheme (CJRS) under those powers. The CJRS, broadly, enabled employers to claim support payments to enable them to pay furloughed employees a proportion of their salary even though they were not working. The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Directions made on 12 November 2020 (the 5^th Direction) and 15 April 2021 (the 7^th Direction) set out the conditions for claims which are relevant in the present case.

Paragraph 3 of each of the 5^th and 7^th Directions provided that a CJRS claim could be made in respect of an employee who was a “flexibly-furloughed employee” in the claim period.

Paragraph 6.1 of each directive defined a flexibly-furloughed employee (so far as material) as being a “qualifying employee for the purposes of CJRS”.

Under paragraph 6.2 of each Direction, an employee is a qualifying employee if (in addition to other conditions) the employer made a Real Time Information (RTI) return in respect of a payment to the employee within a specified period. In the 5^th Direction, the period was after 19 March 2020 and before 31 October 2020. In the 7^th Direction the period was after 19 March 2020 and before 3 March 2021.

In summary, an employer can make a valid CJRS claim in respect of an employee only if they have made an RTI return for the relevant employee within the periods specified (between 19 March 2020 and 3 March 2021). If no such return has been made, the employee is not a “qualifying employee”, and no claim may be made.

Where an employer has received Coronavirus Support Payments (Support Payments) to which they were not entitled, paragraph 8(1) of schedule 16 provides for HMRC to recover the payments by assessing the employer to an income tax charge. Under paragraph 8(4), the income tax became chargeable, in the present case, when the Support Payment was received. Paragraph 8(5) provides that the amount of income tax due is the amount of the Support Payment to which the applicant was not entitled.

Paragraph 9(1) empowers HMRC to raise assessments to recover the tax they believe to be due under paragraph 8.

Paragraph 9(2), together with section 34 Taxes Management Act 1970 imposes a time limit of four years for making the assessment in the absence of careless or deliberate behaviour.