At the end of next month (Thursday 30 September 2021), the Coronavirus Job Retention Scheme, or as more commonly known furlough, will end.
At the beginning of the pandemic, employers were given the option to put their staff on furlough, with the government paying a certain amount of an employee’s salary per month. We previously published a series of guides to the support measures here.
The purpose of the scheme was to avoid making people redundant where they could not undertake their normal employment due to the pandemic.
The end of furlough will likely prove hard for many businesses who are still relying on it to ensure the continued employment of some of their workers. Without this support they could find themselves in a position of making some employees redundant.
The pandemic was an unparalleled situation for everyone in the country, with nobody knowing what lay around the corner. Consequently, some employers claimed furlough in genuine error as they were unclear of the rules or because they were focusing solely on their business and its survival. Unfortunately, there are cases where furlough has been used fraudulently with businesses deliberately claiming excessive amounts from the government and it will now be up to HMRC to assess that.
The Taxpayer Protection Taskforce
To combat furlough fraud the government has asked taxpayers to be vigilant and has set up a hotline for people to call in and report suspected fraudulent use of the scheme.
HMRC also set up a specific taskforce in March 2021 called ‘The Taxpayer Protection Taskforce’. The purpose of the taskforce is to crackdown on the fraudulent use of all COVID-19 support schemes introduced by the government, not just furlough.
The Taskforce will do this by using a number of avenues available to them including information requests, reviewing readily available information (such as company accounts, tax returns and even social media) and following up on tips from the hotline.
It is clear that HMRC is taking furlough fraud extremely seriously. The taskforce will receive over £100 million in investment and will provide roles for 1,265 staff.
The fact that the taskforce’s purpose is to recover from taxpayer’s who have committed fraud, indicates that HMRC are targeting those who they view have deliberately mis-used any of the COVID-19 support schemes. HMRC has previously provided employers with opportunities to come forward and re-pay overclaimed furlough amounts. They probably now feel that employers who have not yet come forward have not done so for a reason.
Where HMRC consider that taxpayers have deliberately claimed furlough, then they can re-claim any mis-appropriated funds, apply penalties and publish their details on a deliberate defaulters list.
How can we help?
Of course, if taxpayers are contacted by the taskforce, it does not necessarily mean that they have deliberately mis-used the COVID-19 support schemes. Genuine error is expected given the circumstances. At the beginning of the pandemic, the whole country was facing a new unknown and businesses are still now facing hardships. As such, it is understandable that some taxpayers who utilised COVID-19 support schemes mistakenly or in error and have not yet come forward to HMRC.
If you think that you may have overclaimed furlough or have been contacted by HMRC’s Taxpayer Protection Taskforce and think that there have been some misunderstandings, please do contact us. We can have a look at your situation in detail and help explain to you and if necessary, HMRC your position. In doing so we can help mitigate any penalties if they are due if the circumstances allow for it.
Even if you are unsure about your position and would like clarification, let us know. We can give you peace of mind and if a disclosure to HMRC is needed, the best course of action is to approach HMRC first rather than wait for them to approach you, as it will often mean reduced penalties if any are due.
We understand that an HMRC investigation is a stressful time. At WTT, we have years of experience in dealing with HMRC investigations and can take away the stress that comes with it. Please email at firstname.lastname@example.org for further information.