Farshad Khalili-Motlagh t/a Borge Restaurant v The Commissioners for HMRC
[2024] UKFTT 541 (TC)
Zoe Shisha Events Limited v The Commissioners for HMTC
5 April 2023
[2023] UKFTT 398 (TC)
First-tier Tribunal
A company claimed too much money from the government's furlough scheme. The government partially won, getting some of the money back, but not all because of issues with how the claim was calculated for one employee. The company's explanation didn't have enough proof to convince the judge.
Key Facts
- •Zoe Shisha Events Ltd appealed assessments totaling £14,895 for CJRS overpayments.
- •The assessments were issued to the director, Zoe Muntean, instead of the company.
- •The appeal concerned CJRS claims for Ms. Muntean and Mr. El Sayed.
- •HMRC's compliance check focused on whether salaries used in the CJRS claim matched pre-March 2020 RTI submissions.
- •The Appellant claimed Ms. Muntean's salary was £3000/month from September 2019, while HMRC claimed it was £600/month.
- •The Appellant argued that accountant errors and late RTI submissions caused the discrepancy.
- •HMRC initially accepted the claim for Mr. El Sayed was correct after reviewing the bank statements.
- •The appellant's case rested on the premise that Ms. Muntean's salary was £3000/month before March 2020 despite the RTI records.
Legal Principles
An error in notification does not invalidate an assessment.
Honig and Ors v Sarsfield (Inspector of Taxes) [1985] STC 31, s114(2) Taxes Management Act 1970
A notice of assessment must be served on the person assessed (s 29(5) TMA 1970).
Taxes Management Act 1970
HMRC may assess a person for CJRS overpayments (paragraphs 8 and 9 of Schedule 16 to the Finance Act 2020).
Finance Act 2020
The Tribunal determines the matter in question (s49G TMA 1970); an assessment stands unless the Tribunal finds overcharging or undercharging (s50 TMA 1970).
Taxes Management Act 1970
CJRS reference salary is the amount payable in the latest salary period before 19 March 2020, excluding non-regular payments.
Paragraph 7.7 of the Schedule to the Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction
Outcomes
Appeal allowed in part.
The first assessment was reduced to reflect the correct CJRS claim for Mr. El Sayed; the appeal regarding Ms. Muntean's claim was dismissed due to insufficient evidence of a salary increase before the CJRS deadline.
First assessment reduced to £7735.
HMRC's recalculation, taking into account the correct salary for Mr El Sayed, was accepted.
Appeal dismissed in full regarding the second assessment.
Insufficient evidence to support the appellant's claims of errors in calculation.