Tribunal dismisses SWG Polymer Services Limited's appeal against HMRC's CJRS recovery

Introduction

The First-tier Tribunal Tax Chamber has ruled against SWG Polymer Services Limited in its appeal concerning the recovery of funds claimed under the Coronavirus Job Retention Scheme (CJRS) by HM Revenue and Customs (HMRC). The decision, delivered by Tribunal Judge Anne Redston and Mr Leslie Howard, was handed down on 9 January 2025 following a remote hearing on 25 November 2024.

Background

The CJRS was introduced to support employers in retaining employees during the COVID-19 lockdowns. SWG Polymer Services Limited, a company providing services for the repair and maintenance of injection moulding machines, claimed CJRS funds for its director, Mr Steve Glasby, and his wife, Ms Kim Hagan. HMRC later assessed that SWG had overclaimed £5,997.38 during the periods from 1 March 2020 to 18 March 2020, 19 March 2020 to 30 June 2020, and 1 July 2020 to 30 October 2020.

Key Issues

The Tribunal considered whether SWG was entitled to the CJRS funds claimed. For the first period, it was undisputed that neither Mr Glasby nor Ms Hagan were furloughed, as SWG's business operated normally until the lockdown began on 23 March 2020. For the second period, Mr Glasby admitted to working at least 18 hours, thus disqualifying him from being considered a furloughed employee. The third period involved claims for flexible furlough, which required prior valid CJRS claims, which SWG could not substantiate.

Tribunal's Findings

The Tribunal upheld HMRC's assessments, concluding that SWG was not entitled to the CJRS funds claimed. It found that Mr Glasby had continued to work during the periods in question, which violated the conditions for furlough. The Tribunal also noted that SWG's failure to report overclaims in its corporation tax returns did not prevent HMRC from recovering the overpaid amounts.

Legal Framework

The CJRS was governed by a series of Treasury Directions under the Coronavirus Act 2020. The Tribunal examined these directions, particularly the definitions of 'furloughed employees' and the conditions for making valid claims. The Tribunal concluded that SWG's claims did not meet these legal requirements.

Conclusion

SWG's appeal was dismissed, and HMRC's assessments were upheld. The Tribunal clarified that it could not direct HMRC to agree to a time to pay arrangement, advising SWG to negotiate directly with HMRC.

Appeal Rights

The Tribunal's decision includes full findings of fact and reasons. Parties dissatisfied with the decision have the right to apply for permission to appeal within 56 days of the decision being sent.

Learn More

For more information on employment law, see BeCivil's guide to UK Employment Law.