CJRS Compliance Updates

UPDATE - This article was updated on 19 October 2021 for further information from HMRC in respect of nudge letters. 

While the CJRS closed on 30 September 2021, HMRC’s compliance activity, started last year, continues. Over recent months, we and the other professional bodies have been discussing various aspects of HMRC’s compliance activity following concerns raised with us by members. Members engaged in reviewing or checking historic claims may find the following updates helpful.

HMRC ‘Nudge’ Letters

In general, HMRC is not seeking to identify innocent errors. They have been focusing their compliance efforts where their risk profiling indicates there could be a potentially abusive claim. However, it is inevitable that some of those who consider that they have claimed in good faith may also be selected for review.

As part of their compliance activity, HMRC have in issued a number of ‘nudge’ letters asking employers to check their CJRS claims. Concerns were raised with us regarding the scale of the work required in some cases to check large numbers of individual calculations. Some agents reported to us that they felt that, without knowing what HMRC was looking for, they were potentially looking for a needle in a haystack. Requests to HMRC for some indication of the reason behind the nudge letter have not always provided significant answers.  

This is a difficult area for HMRC to negotiate. They have been very careful not to explain the basis of any concern as doing so could mean that any resulting disclosure by an employer had to be categorised as ‘prompted’. Following an approach by ATT, HMRC has now shared the following update with us which members may find helpful when considering what work is required in order to respond to one of these nudge letters.

“In line with our strategy we want to help customers to get things right.  The CJRS letter is aimed to nudge customers to look again at their claims. The areas which would raise concerns include

  • Whether the overall claim looks larger than we would expect based on previous filings
  • Whether the number of employees and the type of employees claimed for appears credible
  • Whether the pattern of RTI filings and claims is broadly in line with what we would expect.”

This suggests that before considering detailed line-by-line work, anyone reviewing a CJRS claim might first want to stand back and look more holistically at the claim for substantial errors – checking the wood before the trees so to speak.

Update 19 October 2021 - Following discussions with HMRC about whether or not a nudge letter was intended to result in a 'prompted' disclosure (which attracts higher penalties), we understand that the nudge letters will not be considered to be a prompt by HMRC and a subsequent disclosure following a nudge letter can still be considered unprompted for the purposes of assessing any penalties.  Accordingly, HMRC are not able to reply to correspondence from an employer resulting from a nudge letter to confirm they are content with any disclosures made. 

Employers are not obliged to respond to a nudge letter, but an employer who choses not respond will be putting themselves at a higher risk of enquiry.


The other area we (in conjunction with other professional bodies) have been exploring with HMRC is when (or indeed if) compensating errors could be offset. Since 1 November 2020, there has been a short deadline for amending a claim to report an underpayment (28 days from the end of the month the claim relates to) while there is no equivalent cut off for reporting overpayments.

HMRC have now updated their guidance to confirm that where errors have resulted in both under-claims on some employees and over-claims on others within a given claim period it is possible to net those errors off. Only any resulting over-claim needs to be repaid. It is important to appreciate that no such offsetting is permitted if the errors arose in different claim periods.

The guidance also warns that, where an employer identifies an under-claim, they should take steps to correct any underpayment made to the employee, as failure to pay a minimum of 80% of ‘reference pay’ would lead to the claim for that employee being invalidated.  

Other resources

A longer article on the topic of offsetting can be found on AccountingWEB.

Further articles on correcting CJRS claims and PCRT implications are also available on the ATT website.


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