Directors may be held accountable for CJRS funds that have been overclaimed.
HMRC may issue a notice making a person (or individuals) jointly and severally responsible for the appropriate tax liabilities if they suspect a firm (including LLPs) is insolvent or likely to become bankrupt, and overclaimed CJRS awards owing will not be paid. This means that everyone who receives a notification will be jointly and severally accountable for the company’s obligations.
HMRC has released guidelines outlining the requirements that must be met in order for them to exercise their powers:
- If an officer of HMRC is satisfied that all four of the legislation’s requirements A to D have been met, he or she may issue a joint and several responsibility notice to an individual.
- The firm is in the middle of an insolvency proceeding, or it is on the verge of becoming such.
- As a result of receiving a COVID-19 assistance payment it was not entitled to, the firm is subject to an income tax levy.
- At the time the tax was originally imposed, the individual was in control of the firm’s management, and he or she understood (at the time) that the company was not entitled to the COVID-19 assistance payment.
- There’s a good chance that part or all of your income tax due will go unpaid.