Furlough Fraud Investigations
HMRC Furlough Fraud Investigations have started with HMRC officers investigating companies and directors accused of, or suspected of, committing Furlough Fraud.
HMRC intend to use their information and inspection powers to check Coronavirus Job Retention Scheme (CJRS) claims have not been overpaid or fraudulently claimed. They will be checking 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 furlough fraud investigations and HMRC covid support 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 an Online Enquiry or call us directly on 01908 414990 and we will be pleased to help you.
Wrongly Applied for Applications
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. This includes the Furlough Scheme, where the claimant was not entitled to or used the funds 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. An example would be where CJRS furlough payments were not used for paying employees. Essentially, this means HMRC intend to pursue companies and individuals. This is to recoup any incorrectly claimed or misused government funds. HMRC will then add a fine for this behaviour.
HMRC have already made their first arrests relating to furlough fraud. As part of this, HMRC seized all computers and digital devices. They also froze the bank accounts relating to the individuals and the 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, and then workers only find out when paid.
- A company claims furlough money for a “ghost” employee. This may be someone they dismissed or “recruited” in order to make false claim.
Detailed Furlough Fraud Investigations are emerging rapidly. There has been over 1900 individual tip offs to HMRC already made.
HMRC have also stated they will use their information and inspection powers to investigate any concerns around furlough fraud. Due to resource, many investigations are likely to take place some months, or even possibly years after the closure of the Furlough schemes.
Many companies will only retain some key documents for 6 years. Relying on some documents e.g. the notes of a call you had with an external HR advisor, are likely to be outside your normal data retention policy. Businesses 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 an investigation letter 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.
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