The Government’s Covid19 Job Retention Scheme has been seen by many as an unqualified success. It has cost the government a very significant amount of money and businesses who claimed furlough payments through the Covid 19 Job Retention Scheme will be subject to scrutiny by HMRC. All claims will be checked and validated internally . For most businesses this will be a painless process. However, some will be subject to further investigation and others will be prosecuted for fraud. The Government will want to be seen to be robust on those who have abused the scheme, they will also be seeking to claw back some of the costs incurred.
We anticipate the common types of furlough fraud which will be prosecuted will be:
- Claims being made in respect of employees who continued to work during the period that they were furloughed (with or without their knowledge)
- Claims for furlough payments being made in respect of staff who left the business during the pandemic
- Staff being recruited and furloughed purely to claim payments under the scheme
We anticipate that the main focus will be in respect of employees who continued to work whilst their employer claimed furlough payments. 795 such complaints were made to HMRC in the period 22 April to 14 May by employees.
If you have concerns that you or your business may be investigated further due to deliberately dishonest claim or an honest mistake then it is important to obtain legal advice from the outset. Do not wait for the knock at the door as you are likely to be arrested and unable to obtain advice and assistance other than at the police station. The best way to deal with any investigation into a business is to be properly prepared for the possibility of arrrest and for your business being searched and records seized – see our blog post: https://www.isonharrison.co.uk/blog/what-are-corporate-investigations/
Penalties for furlough fraud could include, imprisonment for directors, unlimited fines, disqualification from acting as a director and confiscation proceedings. In essence, committing ‘furlough fraud’ is no different to committing any other type of fraud, and the penalites will be similarly severe.
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Ison Harrrison have advised businesses ranging from sole traders to multi-national on compliance and regulatory matters. We have a strong corporate and commercial team which sits alongside our criminal and regulatory law offering. As such, we understand your business just as well as we understand criminal law. We have a team of expert employment lawyers available to assist with the defence of furlough fraud cases ensuring that we have all angles covered in-house.
We are able to represent clients all over England and Wales. We will attend your business if necessary or arrange video conferencing to discuss your case and your business. We are available 24 hours a day 7 days a week for advice.
For more information, please give us a call on 0113 284 5000 or email email@example.com