Furlough fraud and other transgressions

legal updates

The HMRC hotline has reportedly been busy with reports of suspected abuse of the furlough scheme coming from concerned well-wishers.

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As could only be expected, HMRC is already hot on cases of the furlough scheme abuse. A businessman from Solihull has been arrested in connection with a £495,000 furlough fraud investigation.

The HMRC hotline has reportedly been busy with reports of suspected abuse of the furlough scheme coming from concerned well-wishers. Would it not be so self-gratifying for some employees made redundant to share concerns of potential furlough abuse with those eager to listen, all meaning well of course. 

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

First, document everything in relation to furlough and retain the records for 6 years at least. Remember that a furloughed employee cannot do any work on furlough. This includes furloughed hours under the present flexible furlough. The Treasury position keeps shifting on this ‘no work’ requirement, it would be advisable to at the very least keep a copy of your written instruction to cease all work for you while on furlough, better still a copy of signed agreement, templates are available in our previous updates.

After a claim for furlough grant is submitted online, it can be withdrawn within 72 hours using the digital service.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

  • 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 you a claim you put through the furlough scheme is correct,  you can contact Lawgistics helpline and speak to one of our advisors.

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Kiril MoskovchukTrainee SolicitorRead More by this author

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