Oxford: Law firms confidential helpline for those caught in furlough fraud

Corporate law specialists Reeds Solicitors urge worried businesses to come forward as the chancellor announces £100 million taskforce to combat furlough fraud.

On the back of the chancellor’s budget announcement regarding the creation of a new £100m taxpayer protection taskforce to investigate spiralling cases of ‘furlough fraud’, leading corporate crime specialists, Reeds, are encouraging businesses who may have been caught up in this to seek advice as a matter of urgency.

The coronavirus job retention scheme (CJRS), launched back at the start of the pandemic in March 2020, was set up to try and help support employers and minimise mass unemployment. At its peak, in the autumn of 2020, the scheme was supporting over 9m jobs. Since the start of January this year, tip-offs to the taxman have risen steadily from just 3,000 last April to almost 25,000 with unlawful claims not estimated at up to £5b.

Experts from Reeds say that the speed in which the scheme was implemented combined with the lack of easily accessible information and guidance surrounding the process, has meant thousands of businesses may have found themselves ‘unwittingly breaching the rules’ which in turn has opened them up to investigation and possible prosecution.

Julian Richards, who specialises in corporate fraud and HMRC matters said, it is vital that any organisations facing HMRC investigation take advice at the earliest possible opportunity.

"The latest figures suggest that around £5b of CJRS funds have been fraudulently claimed or paid out in error,’ commented Richards. HMRC has signalled its intent to aggressively investigate all wrongful payments and prosecute those who they believe to have committed fraud and we certainly expect to see high levels of enforcement activity over the coming months. The new taskforce will deploy a team of more than 1,250 HM revenue and customs officials to investigate and prosecute people who have unlawfully claimed cash under schemes designed to help businesses and workers weather the pandemic.

"If you think your business may have made mistakes, the best advice we can offer is to seek professional guidance and start some dialogue with HMRC as soon as possible. Early and effective engagement can often help prevent investigations from escalating and reduce the risk of prosecution."

With furlough now extended until the end of September 2021 and those unable to work due to caring responsibilities or because they are clinically extremely vulnerable also included in the scheme, Richards predicts investigation numbers will continue to grow.

"Increasing numbers of both individuals and businesses will be worried about being on the receiving end of a criminal prosecution. Although the furlough scheme has been an amazing support for employers it’s also been fraught with issues and widely open to abuse so it’s vital businesses get to grips with both the benefits and the pitfalls."

If you think your business may need some advice surrounding an HMRC investigation or potential furlough fraud case, please contact the firm’s manging partner, Jan Matthews direct on 0333 023 7603