Since the Coronavirus Job Retention Scheme (CJRS) was first announced on 20 March 2020, there have been numerous updates and variations to the scheme. Given the complexity and changing guidance in this area, there will be many circumstances where claims have been made for the furlough grants incorrectly across a range of culpability, from innocent mistakes to deliberate fraud and the whole range in between.
HMRC has already started investigations into reclaiming furlough payments which were claimed incorrectly and are requesting access to communications including email, phone records and web browsing histories to assist its investigations into erroneous furlough claims. It can request those records from telecoms networks as well as the employer and can examine if calls were being made to employees by their employer whilst they were on furlough to establish if the employee was in fact working.
Whilst innocent errors are unlikely to lead to a criminal prosecution, there may still be demands for repayment, interest and costs at a time when a business can ill afford it. For fraudulent claims under the Furlough and Bounce Back Loan Schemes, the consequences are of course much more serious not only for the business but for the individual directors and officers party to fraudulent claims.
In addition, where directors have abused bounce back loans there is the risk that any subsequently appointed liquidator of their company will demand the director repays the loans personally.
Our webinar provided an outline of the steps being taken by HMRC to clawback sums paid to businesses since March 2020 in connection with furlough payments, an update on the consequences of Bounce Back Loan Scheme (BBLS) abuse, and the proactive steps that a business can and should take now. We looked at:
• Where are the potential ‘pinch points’?
• What should a business be doing now to protect itself from any challenge?
• What steps can be taken by a business to mitigate any downside of an HMRC audit or investigation?
• What are the risks for the business and the directors personally for misusing both furlough and BBLS monies?
• How can Edwin Coe help?
You can view a recording of the webinar here.