Furlough cases being investigated by HMRC

The government's Job Retention Scheme has made a dramatic difference to many businesses. The administration of the payroll has been a challenge and multiple changes and adjustments to the system can lead to errors. Between the errors and fraudulent activity HMRC have a busy investigation unit at work and will pick through every anomaly for as long as they see results from their investigations.

There are several different ways that an employer may potentially have made errors or misused the scheme, and HMRC is reviewing all of those through their Risk & Intelligence Service (RIS). With data from VAT returns, National Insurance payments, PAYE, annual account filing and of course furlough claims a computer program will soon highlight any irregularity.

If HMRC determine that an employer has not used the scheme correctly the very least they will expect would be the overpaid amounts to be returned along with interest. There is also the potential that a range of financial penalties will be introduced, with deliberate misuse attracting higher penalties than those who were careless. In the worst cases, HMRC are likely to seek to investigate criminally.

If HMRC find misuse, it is likely that they will also escalate those enquiries by looking into other areas of the employers and business owners tax affairs. This is understandable because if there is deliberate abuse of the furlough scheme then logically there would be the inclination for other deliberate abuse to occur.

On the HMRC website an employer can report any overpayments from the scheme and can correct them, a far better way of dealing with an error than waiting for the letter or email informing you of an investigation.

If you are worried about your own submission, please get in touch.