The Government has established a new Taxpayer Protection Taskforce, whose aim is to tackle fraud from the various COVID-19 support schemes.
The new taskforce will be supported by a £100 million investment and manned by more than 1,250 HMRC employees, who will seek out those who have misused or overclaimed for the Coronavirus Job Retention Scheme (CJRS) and Self-Employed Income Support Scheme (SEISS).
It is estimated that around £3.5 billion of funding was claimed either fraudulently or mistakenly, which means the new department may have a big task ahead of it.
For businesses, the creation of the taskforce should also act as a prompt to make sure that they are compliant with the schemes they have used and provided accurate information in their claims.
Under its remit, the taskforce will be required to investigate employers who have deliberately claimed wages via the CJRS they were not entitled to. This could include:
HMRC understands that mistakes may have been made by employers but it says it now expects businesses to report and rectify claims that are inaccurate within 90 days or face penalties.
Under the Finance Act 2020, HMRC has the power to recover payments from businesses that were not entitled to support, including recovering the full over-claimed amount through a tax assessment and by imposing penalties of up to 100 per cent of the wrongful and/or fraudulent claim. HMRC may also “name and shame” deliberate offenders.
In the case of more serious fraud, HMRC may lead an investigation and prosecution for criminal offences, such as false accounting or cheating the public revenue. Employers could also the strict liability offence for failing to prevent the facilitation of tax evasion under the Criminal Finances Act 2017.
Given the seriousness of these offences, employers that have utilised the furlough scheme should carefully review their furlough payments to ensure the claims made were legitimate.
They should also collate all documents relating to claims and store them securely for up to six years to ensure they have proof if HMRC decides to investigate them.
Where an employer finds discrepancies, they may need to make a disclosure to HMRC at the earliest opportunity to minimise the scale of the penalty they face.
How we can help
If you believe you may have overclaimed via one of the Government support schemes you must contact us at the earliest opportunity. We can review your claims and supporting documents to help you decide whether a disclosure to HMRC is necessary.