Tax Consultant Carter Backer Winter
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Furlough fraud puts business ethics to the test

Whistleblowers have reported nearly 2,000 cases of furlough fraud to HMRC. What should advisers do if they believe clients are not abiding by the rules of the coronavirus job retention scheme (CJRS)?

4th Jun 2020
Tax Consultant Carter Backer Winter
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The coronavirus business support measures open up possibilities for dishonesty and abuse, and this is particularly the case with CJRS grants, which should be used by employers to pay the costs of keeping employees on furlough.

AccountingWEB members have already swapped a few stories about dodgy CJRS claims in Any Answers, including the landlord who wanted to submit a claim for his partner, who he suddenly decided should be on a salary of £12,500 to collect rent. Or the client who furloughed two employees and then took on family members to work for the company.

Tales such as these present an opportunity for accountants to reflect on what constitutes a fraudulent claim and how they should respond should they encounter such a situation. This article sets out current professional guidance on the subject.

Reporting fraud to HMRC

Before the CJRS furlough scheme portal opened for claims last month, HMRC launched a new fraud hotline  (tel 0800 788 887) and an online whistleblower service based on a structured email form. By 24 May the CJRS scheme had been used by 1m employers claiming for 8.4m employees on furlough. To date, HMRC has received around 1,900 reports of potential fraud related to the scheme.

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Replies (3)

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By johnjenkins
05th Jun 2020 12:57

Could some of these "frauds" come from agents claiming on behalf of their clients or is this just "fraud" that has been reported to HMRC independently?

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By moneymanager
05th Jun 2020 18:24

There's no excuse if "a landlord" really did do that, he obviously hadn't read the rules and the claim would fall at the first hurdle.

It is worth noting that numerous classes of people have been severly disadvantaged by the various support schemes, that landlord might have been due to complete on a sale and vacated a tenant, he could neither sell, let, nor claim supprt for the void, he does though have to pay his mortage, council tax, and service charges.

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By KateRich
11th Feb 2021 09:50

I’ve heard of a local business where the director and other senior staff members are alternating weeks off on furlough, allegedly as “they won’t get the opportunity again”. This is happening whilst business is good and a junior/low paid member of staff is handling most of the daily workload and put under excess strain, no time for lunch breaks etc. Any one else heard of this kind of thing going on and what would the advice be please?

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