Furlough Fraud Investigations
HMRC will and have started prosecuting and investigating companies and Directors accused of, or suspected of, committing Furlough Fraud.
HMRC intend to use their information and inspection powers to check Self-Employment Income Support Scheme (SEISS) or Coronavirus Job Retention Scheme (CJRS) claims have not been overpaid and that CJRS payments have actually been used to pay furloughed employee costs and not used for other purposes.
Altion Law are experts at dealing with HMRC Tax Investigations. If you are concerned about furlough fraud or any claims you have made under any government covid support scheme and would like to have a confidential discussion with a member of our team, please either make a Free Request For Call Back or call us directly on 01908 414990 and we will be pleased to help you.
HMRC has outlined it will raise assessments to recover payments made to companies or self-employed individuals who incorrectly claimed from the covid support schemes, including the SEISS and CJRS, which the claimant was not entitled to or used for other purposes.
HMRC will also be able to charge a penalty, if it is found the SEISS and CJRS furlough payments were deliberately made incorrectly, or where it is found that CJRS furlough payments are not used for paying employees. Essentially, this means HMRC intend to pursue companies and individuals to recoup any incorrectly claimed or misused government funds, and will then add a fine for this behaviour.
HMRC have already made their first arrest relating to furlough fraud and as part of this seized all computers and digital devices, and also froze the bank accounts relating to the individuals business.
There are 3 main suspected types of furlough fraud identified:
- A company furloughs staff but asks them to continue to work or volunteer unpaid
- The company furloughs staff without telling them. The workers only find out when they are paid
- A company claims furlough money for a “ghost” employee who may be someone they dismissed or “recruited” so they could claim the money.
However, more detailed furlough frauds are emerging as over 1900 individual tip offs to HMRC have already been made.
HMRC have also stated they will use their information and inspection powers to investigate any concerns around furlough fraud but this requires changes to IT systems and internal processes. This means that many investigations are likely to take place some months or even possibly years after the closure of the Furlough schemes.
As many companies will only retain some key documents for 6 years. If you are ‘relying’ on some documents e.g. the notes of a call you had with an external HR advisor, these documents are likely to be outside your normal retention policy, so businesses will need to consider if these need to be retained, as directors could be investigated any time within 6 years by HMRC.
if you have received any communications from HMRC in relation to Furlough Fraud or a Furlough Compliance Investigation or are concerned you may receive these communications in the near future, Altion Law offers an initial consultation service to discuss these concerns.
If you would like to have a free confidential discussion with a member of our team, please either make a Free Request For Call Back or call us directly on 01908 414990 and we will be pleased to help you.
- What Happens If You Are Suspected of Serious Tax Fraud?
- What Happens If I Am Criminally Investigated by HMRC for Tax Fraud?
- What Powers Does HMRC Have To Investigate Tax Fraud?
- Can HMRC Use Intrusive Surveillance?
- What is HMRC’s Criminal Investigation Policy?
- Why is HMRC Using the Criminal Prosecution Route More Often?
- When Will HMRC Will Carry Out A Criminal Rather Than Civil Investigation?