Claims were contrary to the furlough scheme

The taxpayers – which were related companies under common control - made coronavirus job retention scheme (CJRS) claims for the sole director and shareholder (PW) and an employee (CHW). This was on the basis that both individuals were paid a fixed salary.

After enquiries HMRC concluded that PW and CHW were variable rate employees and the claims were incorrect. The taxpayer appealed.

The First-tier Tribunal found that although the employment contracts between the parties stated that PW and CHW were fixed-rate employees under the terms of the contracts they were paid variable rates.

However the tribunal echoed HMRC’s concerns as to what had actually happened saying it was ‘deeply uncomfortable’ about some of the evidence although it concluded there was no sham. It found that the claims of two of the companies were ineligible for the CJRS because the claims were contrary to the exceptional...