Furlough fraud and other transgressions

Date: Friday 07 August 2020

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As could only be expected, HMRC is already hot on cases of the furlough scheme abuse. A businessman from Solihull was recently arrested in connection with a £495,000 furlough fraud investigation. The HMRC hotline has also reportedly been busy with accounts of suspected abuse of the furlough scheme coming from concerned well-wishers.

With the number of important changes in the scheme and calculation rules not at all straightforward, the potential for a genuine mistake is certainly more than negligible. What should be done?

Firstly, everything in relation to furlough should be documented and the records retained for at least six years. It should also be remembered that a furloughed employee cannot do any work on furlough. This includes furloughed hours under the present flexible furlough. The Treasury position is constantly being amended with regard to the ‘no work’ requirement, so it would be advisable, as the very minimum, to keep a copy of your written instruction to cease all work for you whilst on furlough, but better still have a copy of a signed agreement.

After a claim for furlough grant is submitted online, it can be withdrawn within 72 hours using the digital service.

If you realise later that you made an error and claimed either too much or too little, then HMRC should be contacted on 0800 024 1222. In case of overpayment, the sums claimed in error should be returned either as an adjustment in the next claim or paid back.

Overpayments should be reported to HMRC by the following latest dates:

• 90 days of receipt of the furlough grant
• 90 days of a change in the circumstances which disentitles you to the claimed amount
• 20 October 2020.

If the overpayment is not notified, it may be deemed as concealed, which attracts a penalty of up to 100% of the overpaid amount.

In addition to civil sanctions, HMRC has the powers to investigate potential criminal offences in connection with furlough claims, for example deliberately fraudulent claims.

If you are not entirely sure whether a claim put through the furlough scheme is correct, as an IAAF member you can contact Lawgistics helpline and speak to one of their advisors.

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