Tax investigators have launched more than 6,000 investigations into suspected fraudulent furlough scheme claims
Responding to a question from Democratic Unionist MP Gregory Campbell, Financial Secretary to the Treasury Jesse Norman confirmed that, HM Revenue & Customs (HMRC) has opened 6,150 inquiries into suspected overpayments through the Coronavirus Job Retention Scheme (CJRS) due to error or fraud as of 30 June 2021.
Mr Norman confirmed that a total of 1.3 million employers have claimed under the CJRS, and 11.6 million employments have been placed on furlough for at least part of the duration of the scheme. This information is based on CJRS claims received by HMRC up to 14 June 2021.
HM Revenue & Customs (HMRC) has launched more than12,000 investigations into abusive use of the various business support schemes, with many investigations focusing on the CJRS.
CJRS (Coronavirus Job Retention Scheme) compliance is a significant challenge for HMRC, especially as more than £60 billion has been claimed by employers.
Of these claims, more than £1 billion of fraudulent or mistakenly claimed furlough payments is due to be recovered in the next two years.
As part of its crackdown, HMRC has begun issuing ‘nudge’ letters to those it suspects may have claimed furlough money incorrectly, encouraging them to repay the money voluntarily.
For those unwilling to repay the money owed, HMRC has wide-ranging powers, from auditing and clawback of abusive claims to penalties for failing to report an overpayment. In more extreme cases, HMRC could even seek out a criminal prosecution. HMRC evem has powers to search homes and business premises.
If a business does not notify HMRC of a furlough grant it overclaimed, it will be deemed a ‘deliberate and concealed’ activity, which can lead to a penalty that is equal to the total repayment of the grant.
Companies and their officeholders may also be exposed to liability where there has been a fraudulent claim under both the Finance Act 2020 and the Criminal Finances Act 2017.
There is a 90-day window within which to self-report overpayments of furlough grants. The window runs from the later of the date you receive the grant you are not entitled to, the date circumstances changed so you are no longer entitled to keep the grant or 20 October 2020. There is then a mechanism for repayment of the grant.
If you are concerned that you may have overclaimed via the CJRS or new help administering the scheme, please speak to us.
