Furlough Fraud – keeping it clean
We reported on the first arrests for alleged furlough fraud back in July. The government has received thousands of reports about fraudulent use of the Coronavirus Job Retention Scheme (CJRS). IN the case of genuine mistakes, employers can rectify their position without fear of a penalty if they notify HMRC and repay the money on time. The deadline to notify HMRC is the latest of the following:
- 90 days of receiving the money the business is not entitled to;
- 90 days of a change in circumstances meaning the business was no longer entitled to keep the grant; or
- 20 October 2020 if the business received money it’s not entitled to, or if circumstances changed on or before 22 July.
What else can we do to protect our business?
The simple answer is to check, double check and triple check the claims that have been submitted and that are being submitted under the CJRS. It is vital to ensure both that the employees, in respect of whom claims have been made, were eligible and that funds received have been appropriately applied.
- Make sure that all those employees for whom claims were made under the CJRS were on the payroll as at 19 March 2020;
- Ensure that the initial furloughing of staff was properly documented – and retain these records for at least five years;
- For claims for the period up to 30 June 2020, ensure no claims cover a period when the employee performed work for you; and
- For claims being made after 30 June 2020, ensure that claims are made only in respect of those who were lawfully furloughed, for at least three full weeks in total in the period from 19 March to 30 June (excepting those returning to work from maternity, shared parental, adoption, paternity or parental bereavement leave).
As the CJRS has been regularly evolving since its inception, ensuring full compliance with the scheme has been no easy task. There have been numerous updated versions of the government’s guidance and several variations of the Treasury Direction – and the two have not always been consistent. In that context mistakes are bound to have happened, most of which will have been entirely innocent. What is clear is that now is the time to root out and report inadvertent mistakes. Making sure you are squeaky clean will help to avoid the indignity of an HMRC investigation and prevent employees from having a reason to report the Company for furlough fraud.