The first arrests for defrauding the Coronavirus Job Retention Scheme (CJRS) have been made.
What details do we know so far?
On 8th July, a 57 year old man was arrested in Solihull, West Midlands, as part of an HMRC investigation. Charges include £495,000 fraudulent worth of claims to the CRJS. The rest of the case involves eight other people and additional charges of money laundering and millions of pounds worth of tax fraud.
And that’s just one case.
HMRC have confirmed 4,400 reports of CJRS fraud to date. Obviously, it will take time to investigate each claim within COVID-19 restrictions. But this is a clear signal from HMRC that they will be investigated and their will be consequences.
What is HMRC’s position?
HMRC had to put a scheme in place, in a totally unchartered situation as fast as possible. Their aim to avoid mass redundancies and business collapse meant that money needed to be in bank accounts as fast as possible. There were clear conditions for application, but the importance of speed necessitated a reduction in the time-consuming, meticulous checks we’re used to from HMRC. They should also be able to rely on a certain level of integrity from the business community, particularly during such times of national and global crisis.
Acting director of HMRC’s fraud investigation service, Richard Las, said: “The coronavirus job retention scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used the scheme responsibly, but we will not hesitate to act on reports of abuse of it. This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.”
“As usual, we have built steps in to prevent mistakes and fraud happening in the first place, but anyone who is concerned that their employer might be abusing the scheme should report it to HMRC online.”
What should I do if I suspect a company of CJRS fraud?
If you are concerned that a company you know or are working for has defrauded the CJRS, you need to make a report online. HMRC cannot divert their secure fraud hotline to employees’ home and mobile phones.
I’m worried that someone might make a false claim against my company.
There are two things to consider if you are concerned about false allegations against you.
Firstly, HMRC has a robust investigation process and experienced staff that will get to the truth of the matter. You have rights during any HMRC enquiry and can consult with your own professional advisers.
Secondly, you know you’ve followed the rules. As long as you only furloughed staff that have been with you since 19th March, actually paid them their wages and didn’t ask them to work whilst being on furlough – you’ve followed the rules. Your company must have been authenticated by HMRC in order for you to be accepted onto the scheme.
Make sure you keep yourself up-to-date as things change to accommodate a flexible return to work and new schemes are introduced to support businesses. Only apply for those that you are eligible for, keep all your paperwork and follow the rules of the schemes, and any false allegations will be uncovered as fake.