Josoemag Services Limited v The Commissioners for HMRC
[2024] UKFTT 744 (TC)
Jama Academy Limited v The Commissioners for HMRC
10 April 2024
[2024] UKFTT 302 (TC)
First-tier Tribunal
A company overclaimed government money meant to help pay employees during the pandemic. The government (HMRC) initially overestimated the overpayment. After a court hearing (even though the company didn't show up!), the judge corrected the calculation and decided the company owed less money than the government first thought - £8,863.48 instead of nearly £11,000.
Key Facts
- •Jama Academy Limited (JAL) appealed HMRC assessments totaling nearly £11,000 for alleged overpayments under the Coronavirus Job Retention Scheme (CJRS).
- •HMRC admitted calculation errors, proposing a reduced assessment of £8,863.48.
- •JAL claimed the overpayment was £2,812.
- •JAL's director failed to attend the hearing due to unforeseen circumstances, resulting in the Tribunal proceeding in absentia.
- •The dispute centered on the correct calculation of CJRS payments based on employee status (fixed-rate vs. variable-rate) and the application of the 'average method' and 'look-back method' for determining reference salary.
- •HMRC's initial assessments used a daily average salary, excluding March 2020 payments, and did not consider the 'look-back method'.
Legal Principles
Calculation of CJRS payments under the Coronavirus Act 2020 and the First Direction (15 April 2020).
Coronavirus Act 2020; First Direction
Validity of HMRC assessments under paragraphs 8 and 9 of Schedule 16 to the Finance Act 2020.
Schedule 16, Finance Act 2020
Tribunal's power to proceed with a hearing in a party's absence under Rule 33 of the Tribunal Rules.
Rule 33, Tribunal Rules
Tribunal's power to reduce an assessment under section 50(6) Taxes Management Act 1970.
Section 50(6), Taxes Management Act 1970
Outcomes
Appeal allowed in part.
HMRC's revised calculations, using both the 'average method' and 'look-back method' to maximize JAL's entitlement, were deemed correct. The Tribunal reduced the assessments to £8,863.48.
HMRC's application to amend its skeleton argument was granted.
The amendment was minor, correcting a calculation error, and did not prejudice JAL.
The Tribunal proceeded with the hearing despite JAL's non-attendance.
The Tribunal considered it in the interests of justice given the case's length, previous postponements, and the sufficiency of JAL's case documentation.
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