Josoemag Services Limited v The Commissioners for HMRC
[2024] UKFTT 744 (TC)
Sinter Site Services Limited v The Commissioners for HMRC
31 October 2024
[2024] UKFTT 995 (TC)
First-tier Tribunal
A company overclaimed government COVID-19 support for employee wages. They used wages they *planned* to pay, not wages actually paid. The court said the law is clear: you can only use actually paid wages. The company lost the case; they must repay the overclaimed amount.
Key Facts
- •Sinter Site Services Ltd. appealed HMRC assessments totaling £87,958.82 for overclaimed Coronavirus Job Retention Scheme (CJRS) support payments.
- •The appeal concerned the calculation of support payments for Mr. Seymour, his wife, and three sons.
- •Claims were based on future agreed earnings (increased wages) never paid, not on the permitted 'look-back' or 'averaging' methods (Paragraph 7.2 of the Coronavirus Direction).
- •HMRC argued the claims were excessive for variable-rate employees and should have used Paragraph 7.2.
- •The appellant argued using the increased wages was reasonable given the circumstances and the scheme's purpose.
Legal Principles
CJRS support payments must be calculated using the statutory formula; for variable-rate employees, this is Paragraph 7.2 of the Coronavirus Direction.
Coronavirus Direction, Paragraphs 7.1-7.15, 8.1(a), 8.2
Claims cannot be based on anticipated future earnings that were not actually paid.
Coronavirus Direction, Paragraph 7.2
The Tribunal lacks jurisdiction to consider whether the legislation operates unfairly or whether the appellant had a legitimate expectation of a different outcome.
N/A (Implicit in the Tribunal's decision)
The burden of proving the validity of discovery assessments rests with HMRC; the burden then shifts to the appellant to show the assessments overstate liability.
N/A (Implicit in the Tribunal's reasoning)
Outcomes
Appeal dismissed; HMRC assessments upheld.
The appellant's calculation of support payments based on future, unpaid wages contravened the statutory formula in Paragraph 7.2 of the Coronavirus Direction. The Tribunal found no basis to deviate from the prescribed method, regardless of the appellant's circumstances.
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