HMRC clarifies interaction between EA and NIC element of CJRS grants

Further guidance has been published to clarify the risk of double claiming relief on secondary (employer) NIC, particularly where employers may need to make repayments.

If an employer claimed CJRS support against secondary NIC that they did not have to pay to HMRC (owing to the EA claim), they will have double claimed and will need to repay the secondary NIC element of the CJRS grant. The two scenarios where this could happen are:

Employers that claimed employer NIC through the CJRS grants in March 2020 should check they had sufficient secondary NIC liabilities to absorb £3,000 from April 2019 to February 2020. And employers that claimed employer NIC through the CJRS grants in April to July 2020 should check they had sufficient secondary NIC liabilities to absorb £4,000 from August 2020 to the end of the tax year, 5 April 2021.

And Employers that did not claim the EA until August 2020 should check their payroll software to ensure the EA was not backdated to the start of the tax year, or did not reduce EA to take account of the NIC element claimed through the CJRS grants for April to July 2020.

We are helping businesses currently by reviewing compliance and checking claims so please do not hesitate to get in touch if you have a question.

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