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False Government Grant Claims (SEISS)

Anti Money Laundering Regulations

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After discusing with colleagues how HMRC are going to check for false SEISS grant claims (or any other claim), various options were discussed, including some mentioned here and in the press etc.

We assume there will be an onus on accountants in practice, whom are AML registered, to make a report if we suspect a client has made a false claim. Would appreciate thoughts from others?

Would also appreciate thoughts from David Winch if he reads this as well?

Replies (16)

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By Truthsayer
12th Jun 2020 18:59

Onus, not oweness! (OP has now corrected)

There is certainly such a responsibility. That goes without saying, in my view. Why in this respect would SEISS fraud be different from any other type?

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Replying to Truthsayer:
RLI
By lionofludesch
12th Jun 2020 17:23

Truthsayer wrote:

Onus, not oweness!

Thanks for explaining.

I was genuinely baffled.

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Replying to Truthsayer:
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By BirdnCo
12th Jun 2020 17:35

Whoops, thanks for that, duly amended.

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By Cheshire
12th Jun 2020 17:29

HMRC already have a team starting investigations on all of the covid grants they are involved in paying out.

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Replying to Cheshire:
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By Accountant A
15th Jun 2020 18:15

pih'ph

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By SXGuy
12th Jun 2020 18:31

How exactly will fraud be established?
Can't claim unless eligible, claim if you've been affected, fair enough. But unless someone's income is actually higher than previously how will hmrc establish fraud has taken place?
What if income had been affected at the time of application but picked up later in year?
Can see this being very hard to police quite frankly.

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Replying to SXGuy:
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By yelsnew
12th Jun 2020 18:50

Few cases where you could claim even though not eligible:
Incorporated since April 2019
Stopped trading since April 2019

Both cases would show eligible for the grant per HMRC checker

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Replying to yelsnew:
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By SXGuy
13th Jun 2020 08:03

OK. But if someone was smart enough they could add approx £1000 SE income on this years TR and offset it against the Trading Allowance resulting in zero profit but showing a continuation of trade.

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Replying to SXGuy:
RLI
By lionofludesch
13th Jun 2020 10:31

SXGuy wrote:

OK. But if someone was smart enough they could add approx £1000 SE income on this years TR and offset it against the Trading Allowance resulting in zero profit but showing a continuation of trade.

Just buy and sell stuff on eBay.

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Replying to SXGuy:
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By Truthsayer
12th Jun 2020 19:09

Higher income than previously is not evidence of fraud. It may well be that the income would have risen even more without Covid. The requirement is merely that the business has been adversely affected. It does not mean profit has to be lower than before.

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By yelsnew
12th Jun 2020 18:48

I've a client who claimed and was not eligible (not trading in current tax year due to incorporation) told her to contact HMRC to pay it back, she said she would. Do I need to request proof it was paid back or submit a ML report regardless?

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Replying to yelsnew:
David Winch
By David Winch
13th Jun 2020 11:45

yelsnew wrote:

Do I need to request proof it was paid back or submit a ML report regardless?


Short answer, "No".
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RLI
By lionofludesch
12th Jun 2020 18:53

I can say that my income fell in March to May 2020. In terms of cash flow, invoicing and time when I'd nothing to do.

What I couldn't say, at the time of my claim, was whether that money would come in later.

I can't see SEISS being easy to police. CJRS might be a better bet but hard evidence might be hard (see what I did there?) to come by.

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David Winch
By David Winch
13th Jun 2020 12:20

Hi
Essentially the AML reporting responsibilities in relation to false COVID-19 claims are the same as for false self-assessment tax returns etc.
So the issues are (i) has a crime been committed and (ii) has a benefit been obtained from that crime?
The benefit has to be in money or money's worth (i.e. an asset of some sort or the avoidance of a liability).
The crime in this case will necessarily involve dishonesty - not mere mistake, misunderstanding, ignorance. So you have to consider the 'facts' as your suspected person believes them to be (not the facts as you believe them to be, which may be different). On the basis of those 'facts' is the suspected person behaving dishonestly? If they are, then there is likely to be an offence being committed (typically fraud of some sort).
So then you move on to consider whether a benefit has been obtained. If 'Yes' then the possession or use of that benefit will be a money laundering offence, and you have a suspicion to report.
If your suspicion is in relation to a fraudulent COVID-19 support claim use glossary codes XXCVDXX and XXGPSXX.
OK?
David

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Glenn Martin
By Glenn Martin
13th Jun 2020 21:46

The problem with the scheme is that the terms around it are too vague.

Have you been negatively effected by Covid.

Peronsally i cannot see how anyone has not been negatively effected.

If you lost 1 day at work you have been negatively effected but the grant is the same if you have been off one day or 3 months. If you use profits as the measure who is to say that if you claw back your earnings in the Autumn so you finish up on the year you have claimed falsely.

I have had to spend a few quid on extra kit for home working but will likely finish up income wise for the year as done so much extra work, so am I negatively effected or not. I think you will find there will be very people in trouble for false SEISS claims but there will be more on the furlough as I imagine there is a fair few people claiming furlough who are still working from home but told to say nowt.

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Replying to Glennzy:
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By Paul Crowley
13th Jun 2020 23:14

Agree. Outrageously Vague for SEISS. CJRS rules dead easy, NO WORK FOR THIS EMPLOYER (but can get another employment of start self employment), until directors swing into view: then back to vague again

How can any accountant be expected to know or have suspicion that a self-employed was at no relevant time affected by Covid? The crowdcast Webinars have raised the point that the words are so imprecise as to be meaningless.
Who chose those exact words?

I am really glad we were taken out of SEISS. I wish we had been taken out of CJRS as well.

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