What is furlough fraud?
As much as the furlough or coronavirus job retention scheme was set up at the government’s expense to support us. There are always people who are going to try and take advantage and of course, this case was no exception. Quite a few people and companies have been suspected and convicted of what has become to be known as ‘furlough fraud’. So what it is? Its where business owners will claim furlough funds through fraud or false representation. Sometimes by imitating an employee or claiming on behalf of employees who are no longer there. It is suspected that up to £3.5 billion has been paid out either fraudulently or in error.
How is it being tackled?
After the scale of which furlough fraud was being committed came to light answers were demanded by those down in Westminster. A hotline was set up for people to anonymously report those who they suspected of committing the offence. Around 8,000 calls were received leading to the HMRC looking into 27,000 what they deem ‘high risk’ cases whereby the suspicion of fraud is heavy indeed. They have also set up a web form you can fill in here to report someone you suspect of carrying out the offence.
What are the implications?
Just like a fraud itself is a criminal offence if you’re found to have been guilty of furlough fraud you have indeed committed a criminal offence. The offences themselves can vary but include cheating the public revenue, fraud by false representation and VAT evasion. The sentence handed down by the courts can vary and will depend on a range of mitigating and aggravating factors but can result in a custodial sentence despite some people not expecting to receive such a sentence for a financial of ‘white-collar’ crime.
Are you unsure of how the furlough scheme works?
If you’re unsure at all of how the furlough scheme works in relation to your business it’s always worth seeking out professional advice. After all, you don’t want to make an innocent mistake and then have either the business or yourself liable for the consequences. If you have any questions at all about the scheme, how it works, if your business is eligible and whether you have made any mistakes innocently in error get in touch with a member of our team here at D&K Accounting.