Josoemag Services Limited v The Commissioners for HMRC

15 August 2024

[2024] UKFTT 744 (TC)

First-tier Tribunal

A company overclaimed government money meant to help businesses during the COVID-19 pandemic. The court decided the company made mistakes in their calculations and had to pay back some of the money. The court also said it couldn't consider the company’s complaints about how the government handled things because it only has the power to follow the law.

Key Facts

•Josoemag Services Limited (JSL) appealed against two assessments totaling £59,620.07 for overclaimed Coronavirus Job Retention Scheme (CJRS) payments.
•The appeal was late but allowed to proceed.
•HMRC's initial review reduced the assessment to £48,949.13.
•A further HMRC review identified an ineligible claim for one employee (OF), reducing the amount to £51,244.79.
•JSL's claims were based on incorrect calculations using the wrong reference date and reference salary.
•JSL argued it followed government guidance and paid employees in full.
•HMRC argued JSL's claims did not meet the requirements of the CJRS, specifically the RTI registration requirement by March 19, 2020.

Legal Principles

CJRS claims must be calculated using the correct reference date and reference salary as per the Coronavirus Job Retention Scheme Directions.

Coronavirus Act 2020, Schedule 16 Finance Act 2020, Coronavirus Job Retention Scheme Directions

For variable rate employees, the reference salary is the greater of the average monthly amount paid in tax year 2019-20 and the amount paid in the corresponding calendar period in 2019.

Paragraph 7.2 of the Coronavirus Direction

Employees must be registered on HMRC's RTI system by 19 March 2020 to be eligible for CJRS claims.

Paragraph 3 and 5 of the Coronavirus Direction

The First-tier Tribunal (FTT) has no jurisdiction to consider the fairness of the CJRS or public law arguments regarding fairness and/or legitimate expectation.

HMRC v Hok Ltd, Abdul Noor v HMRC, Trustees of the BT Pension Scheme v HMRC, Carlick Contract Furniture Limited, Oral Healthcare Limited

Assessments under paragraph 9, Schedule 16 FA 2020 must be objectively reasonable.

Jerome Anderson, Jama Academy Limited

The FTT has the power to reduce assessments if an appellant has been overcharged under section 50(6) TMA 1970.

Section 50(6) Taxes Management Act 1970

Outcomes

Appeal dismissed.

JSL's CJRS claims were incorrectly calculated due to the use of the wrong reference date and reference salary, and included an ineligible employee. The tribunal lacked jurisdiction to consider JSL's arguments regarding fairness and legitimate expectation.

Assessments reduced to £51,244.79.

This reflects the overpayment calculated by the review officer, less the amount claimed for the ineligible employee.

JSL's claims for deductions related to employer NICs, employer tax, and pension contributions were largely rejected.

The tribunal found that HMRC's calculations regarding reimbursements for NICs and pension contributions were correct, and that the claim for 'employer tax' was not a claimable expense under the CJRS.

Josoemag Services Limited v The Commissioners for HMRC

Key Facts

Legal Principles

Outcomes

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