After several changes have been made through-out the time that the scheme has been in place, the Furlough Scheme which came into place in March 2020 is now coming to an end, at the end of September 2021.
Originally the furlough scheme covered up to 80% of an individual’s monthly wage, capped at £2.500 per month. It was then changed to 70% capped at £2,187.50 per month and then in August/September 2021 it went down to 60% capped at £1,875. With these changes having been made, its has been estimated by HMRC that some individuals will have been overpaid and submitted incorrect claims and they aim to investigate furlough and clawback any overpayments.
The actual cost of furlough throughout its entire period is expected to be in the region of around 70 billion pounds, that is why HMRC have justified the clawback and claim to only investigate any monies overpaid to help bring that figure down.
Now furlough is coming to an end it is feared that this will have a dire effect on the economy. We are all aware of the struggles of many of UK Businesses and despite many of the restrictions being lifted and many shops and the majority of work places being back open, there undoubtedly has been a vacuum with many companies still struggling from decreased revenues over the last 12 – 18 months.
What does this mean?
I have already written about zombie companies and whether there are many still existing within this format. HMRC have already taken pro-active steps and written thousands of letters out to business owners who’s coronavirus job retention scheme claim may have been too high and/or the conditions for receiving a CJRS grant may not have actually been met.
Upon receipt of such correspondence, HMRC are expecting companies to go through and review their claims and if they had been over payed, they would then need to contact HMRC and arrange to pay back the over payments. Although the CJRS helped them during covid, this extra strain on already struggling businesses strikes a fear amongst the business community.
Next steps?
If you are worried about what steps to take on 1st October or what options are available, then speak to us at Lucas Ross. We offer a free no obligation consultation whilst fully exploring all Business Rescue, Recovery & Insolvency considerations.
So if you’re unsure on what the procedure will be after furlough or need debt advice then contact us today on 03301289489 or email: help@lucasross.co.uk, we would be delighted to see how we could help.
