The Government is setting up a task force to investigate and the crackdown on Covid fraud.
Arrests have already been made, one being for an alleged £6 million of fraudulent Bounce Back Loan claims. These arrests were carried out by the National Crime Agency’s Complex Financial Crime Team and were of three men working for a London financial institution.
If you used an agency to assist you in your Bounce Back Loan application, you may consider your position. You will not want to have a criminal record or suffer a prison sentence.
We are specialists in representing claimants and dealing with the relevant Government departments.
Coronavirus Job Retention Scheme
The CJRS – “furlough scheme” has now been extended to 30 September 2021. But what happens when incorrect claims are made?
This depends on whether a genuine error has occurred, or a deliberately fraudulent claim has been made.
Examples of an error being made are:
In such circumstances, the claim can be amended online if within 72 hours of submission, amended in the next claim, or the employer can inform HMRC of the error within 90 days of receiving the payment. Provided HMRC is notified, no further action will be taken.
The more serious aspect is when fraudulent claims are made. Examples of fraudulent claims include:
Section 106 and Schedule 16 of the Finance Act 2020 provide the mechanism for assessments to be raised to recover overpaid claims and to charge penalties for fraudulent claims of up to 100% of the sum claimed.
HMRC has advised that a task force has been set up to focus on furlough and other Covid-19 support schemes -in excess of 1,000 officers will be working on the task force.
It should be noted that HMRC’s information powers will apply to inquiries into such claims and it would be expected that in the more serious cases a review of the whole business and not just the claim would be undertaken.
When assessments and penalties are raised on a sole trader or partnership, the individual or partners will be personally liable for the sums due.
If, however, the assessments and penalties are raised on a company and that company does not pay and becomes insolvent (or looks like insolvency is a possibility), the director can be held personally liable for the assessment and penalty if they were aware of the incorrect claim.
The liability also extends to shadow directors or an individual concerned in the management of the company.