“Furlough Fraud” – 20 October Deadline

“Furlough Fraud” – 20 October Deadline

As the Coronavirus Job Retention Scheme (CJRS) payments scheme comes to an end HMRC’s investigations of alleged fraud will increase. Media reports estimate that £3.5 Billion of payments have been made by the Government to fraudulent claims or errors. 

There have already been a number of arrests made against alleged fraudsters and HMRC has issued thousands of letter to employers asking them to check their claims. HMRC do not send these letters without having considered a risk review and will think something is wrong. Not responding to such a letter is not a good option; HMRC are highly likely to undertake a detailed investigation. Any incorrect claims will be taxed at 100% to recover the full amount back plus HMRC can issue a penalty up to 100% of that tax depending on the culpable behaviour of the claimant. Or worse, HMRC can prosecute for criminal fraud which could result in a prison sentence. HMRC will also be using the thousands of complaints and “tip offs” that employees have made to them about errors or fraudulent claims. Employees may have made allegations that they were told to continue to work when furloughed or didn’t receive the correct payments. 

It is not all bad news. New anti-avoidance legislation published in July provides a window to employers to correct any mistakes. If payments have been received before 22 July 2020 the employer has until 20 October 2020 to notify HMRC of the mistake without incurring a penalty. For payment received after 22 July the 90 day “amnesty” period will apply from the date of receipt. 

It is therefore important to review claims and make use of this window. Even if a claim had been made knowing it was wrong it is still possible to come forward to HMRC before the deadline to reduce any penalty. Please ask us for advice if you, or your clients, need help.

“Furlough Fraud” – 20 October Deadline

UK Firms Voluntary Return Of £215million In Furlough Cash

80,433 employers have returned over £215million of furlough money to the government who found they did not need it or took it in error.

The loans were given to cover the salaries of their workers, according to figures from the HMRC.

The companies and other bodies have returned £215,756,121 as of September 15, according to data obtained by the PA news agency through a freedom of information request.

Some of the companies claimed smaller payouts the next time they were given furlough cash while others returned the money.

The overall figure that has been claimed as part of the coronavirus job retention scheme (CJRS) is around £35.4 billion.