Furlough Fraud

Dave Jangid | Online Account Filing By Dave Jangid |
Furlough Fraud – HMRC strengthen its grip on investigation

Like every other incentive, furlough hasn`t gone untainted by fraudster activity.

After some alarming numbers of furlough scams being reported, HM Revenue & Customs has begun writing to employers that are suspiciously claimed too much money through the Coronavirus Job Retention Scheme.

With the introduction of the Coronavirus Job Retention Scheme and the Self-Employed Income Support Scheme, HMRC was put under increased pressure to process applications and distribute payments as soon as feasible. Hence, a mechanism comparable to the self-assessment tax regime was created that functioned on a ‘process now, check later’ premise.

Furlough Scheme Fraud: HMRC`s Investigations

As the furlough plan comes to an end, HMRC is risk-assessing claims paid to ascertain eligible situations for a subsequent compliance review and has begun to write to employers who they “feel” have claimed a bit too much than they thought it was needed.

HMRC plans to start an investigation against around 27,000 businesses, which is 2% of those who applied for the scheme. HMRC has stated that any organisation or individual who deliberately sets out to defraud the system would face furlough scam penalties.

The first arrests in connection with potential furlough fraud have already been made!

According to HM Revenue and Customs, a 57-year-old business owner from the West Midlands has been detained as part of an HMRC investigation into a potential Coronavirus Job Retention Scheme scam of £495,000. In a related inquiry, eight additional males have been detained.

Tips to avoid furlough fraud or accidental furlough scam

You should review claims immediately and notify HMRC of any changes needed to avoid being targeted for a compliance check later. Legislation has been introduced that permits you to avoid a fine if you inform HMRC of any knowing or unintentional misuse of CJRS by a specified date.

  • To guarantee entitlement, carefully evaluate any CJRS claims that have been submitted.
  • Check if any documents supporting the CJRS claim are up to date. If an investigation is launched, HMRC will be satisfied that the claim was genuine.
  • Report to HMRC if any amount is claimed in error to avoid any prospective HMRC investigation and to minimise the potential penalties levied.

How to Inform HMRC That I Have Claimed Too Much?

It is critical that you have thoroughly checked your claims to ensure that the amount you are claiming for the furlough scheme or SEISS is correct.

HMRC has issued specific instructions on what to do if you have claimed too much.

There is also further instruction regarding SEISS overpayments.

If you got an excessive amount, you must repay it or face a penalty.

How do I notify the HMRC?

CJRS (Coronavirus Job Retention Scheme)

As part of your next online claim, notify HMRC. Hence, your next claim will be decreased, and you must maintain a record of it for 6 years.

If you are not filing another claim but still owe money, contact HMRC at 03000 322 9430 to pay it back.

SEISS (Self Employment Income Support Scheme)

Use the Government Gateway to fill out an online form that will provide you with bank account information for repaying the grant.

You must have:

  • Government Gateway user ID and password
  • Grant claim reference
  • Self-assessment unique taxpayer reference

How to check my deadline?

For CJRS, you must notify HMRC by one of the following methods:

  • 90 days after the date you received the grant you weren’t entitled to
  • 90 days after the date you received the grant you were no longer entitled to because your situation changed

However, you must notify HMRC of SEISS within 90 days of receiving the award.

FOR THE COMMON GOOD!

Although the great majority of businesses would have used the CJRS appropriately, the HMRC will not hesitate to act if they receive allegations of misuse of the scheme. It’s the taxpayer’s money and any fraudulent claim restricts HMRC’s capacity to help individuals and deprives public agencies of critical financing. As the pandemic continues, it is only fair that HMRC continues to ensure that the employers pay the exact employee tax and national insurance payments they promised to pay when applying for the grant. An HMRC spokesperson said that HMRC’s focus throughout the pandemic has been to serve customers, but it is critical that the tax system continues to work and supports key services such as the NHS. HMRC officers have been told that if a firm is dealing with Covid-related debts, they will not be too harsh on those who owe taxes. HMRC has taken steps to prevent mistakes and fraud from occurring in the first place, but anyone who suspects their employer is misusing the scheme should report it to the HMRC online.

Dave Jangid | Online Account Filing By Dave Jangid |
Note: Please note that the content of the above blog and the aforementioned information are solely for the purpose of awareness and are informative in nature. The content is designed with intent to ease the understanding while preserving the essence and importance of the compliance rules and shall not be considered as an ultimate replication of the rules. Online Account Filing does not own any responsibility whatsoever for any unpleasant event that may arise due to the misinterpretation of a specific part or whole of the information.

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