With the government’s Coronavirus Job Retention Scheme (CJRS) drawing to a close and due to finish on 31 October 2020, the tax authority is wasting no time and has formally started its compliance activity.

This follows last month’s royal assent of the Finance Act, which includes legislation empowering HMRC to tax and clawback COVID-19 support payments under the furlough (CJRS), SEISS and other schemes.

According to a statement issued by BDO, HMRC continues to receive tip offs about incorrect claims – almost 8,000 at the last count, as reported recently by i News.

As part of its compliance activity, HMRC is now writing to employers about their furlough claims in advance of the 90-day deadline to notify or repay excessive claims.

BDO explained that these letters are sent following HMRC’s risk assessment process.

While HMRC is currently encouraging employers to meet the 90-day deadline, BDO noted it expects HMRC to subsequently focus on cases where it can charge significant failure to notify penalties on employers who either knew they were making incorrect claims or who retained the furlough money despite not being entitled to do so.

“HMRC can use its powers to undertake criminal investigations with a view to prosecution – one person was arrested for alleged furlough fraud last month. However, we mostly expect HMRC to use its civil powers,” BDO concluded.

On Monday, the government released new data revealing that a total 400,800 people in Wales are benefitting from the furlough scheme.

“Our unprecedented support schemes have helped thousands of hard working people across Wales and protected Welsh businesses during the coronavirus pandemic,” said Rishi Sunak, Chancellor of the Exchequer, on occasion of the new statistics.

“As we enter the next stage of the economic recovery, our Plan for Jobs will ensure jobs are created and sustained.”