A total of 3,777 businesses have repaid over £760m in furlough grants to HM Revenue & Customs (HMRC) that they did not need, according to the national accountancy group UHY Hacker Young (UHY).
Furlough Fraud| Rosenblatt’s Financial Crime Team
UHY have stated that since the introduction of the furlough scheme in March 2020, £53.8bn has been claimed by employers which has protected approximately 11m employees. The government announced in their March 2021 budget that the furlough scheme would be extended until 30 September 2021 although the government contribution will be reduced.
Although there is no requirement on businesses to demonstrate that they have been financially impacted by COVID-19 in order to qualify for the furlough grants, the scheme is intended to support those that have been badly affected by the pandemic and faced difficulties in maintaining their workforce.
It is believed that this money which estimated around £760m was claimed by businesses in the early stages of the pandemic as a precaution in case they ran into financial difficulties in the future.
UHY noted that in recent weeks HMRC have begun focusing on the businesses who incorrectly claimed furlough money, hoping to encourage more firms to make voluntary repayments. This follows the government announcement in the March 2021 budget confirming that it would be allocating over £100m towards a new HMRC taskforce dedicated to investigating fraudulent claims made under the various COVID-19 support schemes.
HMRC have begun issuing ‘nudge’ letters to those it suspects may have claimed furlough money incorrectly, encouraging them to repay the money voluntarily if necessary. UHY have stated that the next stage of HMRC’s investigation will be much more aggressive. There are harsh penalties for the businesses who claim furlough grants that they are not entitled to. If a business does not notify HMRC of the grant it over claimed, it will be deemed a ‘deliberate and concealed’ activity, which can lead to a penalty of 100% repayment of the grant.
Rosenblatt can help
Rosenblatt has a wealth of experience in criminal law and is uniquely placed to support client’s crime needs during these unprecedented times, consistently ensuring a familiarity with the ever-changing government guidance on COVID-19.
https://www.rosenblatt-law.co.uk/services/financial-crime/#financial-crime
