Following the extension of Covid-19 related restrictions in the UK, the government have announced that the Coronavirus Job Retention Scheme (CJRS) has been extended to 31st March 2021. As of the 18th October 2020, over £41.4bn has been paid out by HMRC for the scheme with over 9.6m jobs furloughed.
Background to the scheme
The scheme allows for employees to receive furlough pay when they are unable to work due to lockdown restrictions. The scheme was introduced in order to avoid mass redundancies which would have devastating effects to businesses and employees.
However, the scheme has unfortunately been subject to misuse and exploitation. Some employers and employees have fallen foul of the furlough rules without realising that they are committing fraud. For example, employers may have acted in haste by putting their employees on the scheme because of the very real worry of their business suffering from the lockdown. This can easily result in mistakes being made. However, not all breaches are innocent. Some people have purposefully exploited the furlough scheme as a means to receive money they are not entitled to.
Furlough fraud in action
HMRC have said that they will adopt a sympathetic approach to mistaken claims. But where the scheme has been improperly taken advantage of, they will not hesitate to criminally prosecute.
The first arrest for furlough fraud was made on 8th July 2020 in connection with suspected false claims amounting to £495,000. More recently in September 2020, a company director and an accountant were arrested following a suspected fraud of £70,000 of taxpayer’s money.
In order to avoid falling foul of the furlough scheme, it is important to stay up to date with the government guidance. If you are an employer or employee, you can find the updated detailed advice on the CJRS on the government website here.
How we can help
If you are an employer or employee and think you have mistakenly made a false claim to HMRC, our team are on hand to help.
Similarly, if you have been contacted by HMRC stating that they are pursuing a criminal case against you, you can contact us by calling 0161 969 3131. You can also fill in our confidential contact form and we will be in touch with you as quickly as possible.