Top-Notch Accountants Limited v The Commissioners for HMRC

2 June 2023

[2023] UKFTT 473 (TC)

First-tier Tribunal

A company got extra money from the government's Covid job support scheme. The government found the company cheated and asked for the money back. The company tried to fight it in court, but lost. The court decided the company had to pay some of the money back, but slightly less than the government originally demanded.

Key Facts

•Top-Notch Accountants Ltd. appealed an HMRC assessment of £19,981.47 for unpaid Coronavirus Job Retention Scheme (CJRS) payments.
•The assessment related to payments for an employee, Mr. Arafat, whose employment began before the CJRS cutoff date (19 March 2020), but whose details were submitted to HMRC after that date (16 April 2020).
•HMRC initially requested repayment of £19,981.47 but later reduced it to £14,673.47
•The appellant claimed they submitted RTI information before the deadline but HMRC found inconsistencies and evidence of manipulated bank statements.
•The appellant's explanations and documents provided were found to be inconsistent and lacked credibility by the Tribunal.

Legal Principles

HMRC's functions regarding the CJRS are as directed by the Treasury under the Coronavirus Act 2020.

Coronavirus Act 2020, section 76

CJRS payments are only for qualifying costs, which include costs shown in RTI submissions made on or before a relevant CJRS day (19 March 2020).

Coronavirus Act 2020 (CJRS Direction), Schedule, paragraph 5(a)(i) and 13.1

Recipients of CJRS payments are liable for income tax if they were not entitled to the payments.

Finance Act 2020, Schedule 16, paragraph 8(1)

HMRC can make assessments for amounts incorrectly claimed under the CJRS.

Finance Act 2020, Schedule 16, paragraph 9(1)

Outcomes

The appeal was dismissed.

The Tribunal found the appellant's evidence to be inconsistent and lacking credibility, and that the appellant did not submit RTI information for Mr Arafat before the 19 March 2020 deadline. The manipulated bank statements were deemed deliberate.

The assessment was varied to £14,673.47.

This reflects HMRC's revised claim and the Tribunal's finding that the appellant was only eligible for CJRS payments from November 2020 onwards.

Top-Notch Accountants Limited v The Commissioners for HMRC

Key Facts

Legal Principles

Outcomes

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