HMRC takes action on furlough fraud

HMRC has reported 27,000 high-risk claims to the Coronavirus Job Retention Scheme, where employers may have either inadvertently or purposefully claimed too much or wrongly.

For those who have made an honest mistake, they will have the opportunity to contact HMRC to put it right – there is published guidance on the correct steps to take.

Employers who do not take this opportunity to correct any wrong claims will be pursued through one-to-one investigations and can expect tough action if wrongdoing is uncovered. The expectation is that 10,000 of these will be followed up in this way.

Welcoming the HMRC’s approach to furlough fraud, Peter Cheese, Chief Executive of the CIPD, commented, “The HMRC is taking a measured and reasonable approach to identifying and tackling misuse of the furlough scheme, recognising that in many instances where there have been inappropriate claims, employers have made honest mistakes due to its complexity and evolution – and that seeking to work with them to address these is the best way forward.”

“However, it is also right that HMRC proactively investigates cases where there is suspected fraud and takes a much harder line with the imposition of penalties and criminal investigation where appropriate.”

“The scheme required trust in employers, and employees, doing the right thing and businesses must show that they acted with integrity. It is concerning that HMRC believe as much as 10% of what was paid out on the scheme may be incorrect, which not only may have immediate financial implications for some, but also reputational issues that may be more lasting.

“In these challenging and uncertain times, it is even more imperative that businesses act responsibly for the good of all their stakeholders. It is important that the furlough scheme has been used by employers as intended since it was introduced.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.