​As a limited company director, furloughing myself was all I could do to stop my income falling to zero at the height of the pandemic. I took great care to be accurate and honest in my claims – so when HMRC told me I may have overclaimed, I asked to see their working. Here’s what happened.

Many of you reading this may have received the same notice I did – it appeared to be a routine letter, holding no specific information about my claims, but it nonetheless told me that according to records and information held by HMRC, I may have overclaimed and would subsequently need to repay some or perhaps all the grant I had received. I was told to review my records and reminded that even if I reaffirmed my claim as accurate, HMRC may still come back to me for more evidence.

Suddenly, the onus had been placed on me to prove them wrong, and I was left without even a hint of where to begin searching for an error in my furlough claims. Which month did this happen in? How much might I have overclaimed by? Presumably, HMRC had some evidence that triggered this action to begin with – what was it? I pressed for more information and made clear I would be happy to share my own calculations and correct any mistakes.

The curious response I received was that, as my claim was not subject to a formal enquiry by HMRC, they did not hold enough information about my individual claim to help me.

Whilst reassuring to learn I wasn’t under investigation – a process which, despite my confidence in my claims, I would rather not deal with – I wanted to resolve this sooner rather than later. Having thoroughly checked my own records, I went back to HMRC and explained my strong hunch as to why any of this was happening.

Like many of the self-employed, my monthly earnings are irregular – and, like many other limited company directors, IR35 led to blanket bans by my clients and the prospect of zero company income, causing dramatic changes to the way I earn a living. Perhaps these fluctuations had unintentionally raised a flag within HMRC’s systems?

Again, HMRC refused to address the specifics of my case – despite it being their notice that prompted this frustrating exercise to begin with. It’s still unclear whether HMRC are satisfied with the information I provided, whether they will ask for further evidence, or even open an investigation at a later date.

Ultimately, this is an exasperating reminder that I, along with hundreds of thousands of limited company contractors, have had little choice but to claim support that was never designed with us in mind.

By lacking the political will to provide proper support for small, limited company directors, the government has left HMRC with the burden of chasing me and perhaps many others like me, to make sense of our relatively small furlough claims.

I shared this with the IPSE policy team for their advice and comments. They were very interested as they hadn't seen one of these emails before and were incredibly helpful throughout.

This is a blog by an unnamed IPSE member and should not be taken as advice. For more guidance on SEISS and furlough clawbacks, please check here.