The Coronavirus Job Retention Scheme (CJRS), commonly referred to as ‘furlough’ was introduced by the UK Government in March 2020.
While relatively unheard of prior to the pandemic, we have since March 2020 been consistently hearing or been using this word. Read this article to get some top tips from Sheetul Sowdagar at Russell-Cooke to wrap your head around furlough fraud and deal with enquiries.
Many of us may or may not know but the Oxford English dictionary defines furlough as “to give somebody permission to leave their duties for a period of time”.
What is furlough fraud?
Examples of furlough fraud could include the following:
- Furloughed staff being asked to continue to work;
- Claiming furlough pay for staff who did not qualify for the scheme;
- Claiming furlough pay for ‘made up’ staff;
- Over-claiming furlough pay;
- Not passing the full amount of furlough pay to the furloughed employees;
- Deliberately providing false information to receive furlough pay from HMRC.
While it is understood that only a very small minority intended to defraud the HMRC, it is known that the HMRC have started ramping up their investigations and actively following up on tip offs received. Many business owners in the UK who had accessed the furlough scheme to help retain their employees during the pandemic may receive queries from HMRC. These could even be in cases where only legitimate furlough claims had been made.
Help – I’ve had a query from HMRC
Below are some practical tips to help you respond to any queries received.
Tip 1: Do not panic!
Understand that HMRC may be following up leads or simply asking questions to ensure that all claims made were done so properly.
Tip 2: Do not bury your head in the sand!
While it is easy to get distracted in keeping busy to keep the business running, understand that this is not going to go away. If you cannot find time yourself to engage with HMRC, then make sure you instruct an adviser who can do so on your behalf.
It is often too easy to say that we ‘will deal with this later’ and soon enough a month or more has gone by. It is always better to be proactive and start engaging with the HMRC as soon as possible. This will not only show your intention of being cooperative, but will also help address any issues, without the need for escalation.
Tip 3: Make sure you review your records and keep copies.
This will allow you to refresh your memory and more importantly have all your documents ready to disclose to HMRC if needed.
Tip 4: Be transparent!
In the event you realise that a mistake had been made, or any overpayments had occurred, make sure you promptly inform HMRC of the same.
Tip 5: Keep records for a minimum of six years.
Even if you were successful in addressing any queries and the matter subsequently resolved, please keep your records for a minimum of six years to assist you with any potential further queries.
We can help
It goes without saying that if any actions are being taken against you by HMRC, please seek independent legal advice urgently. Contact our senior associate Sheetul Sowdagar for help