HM Government gave out more than £35.4 billion through the Coronavirus Job Retention Scheme. Their aim is to support 1.2 million employers and 9.6 million furloughed employees.

There has been a number of arrests relating to misuse of the scheme with a belief that between 5-10 per cent of claims are deliberate acts of fraud or made in error. The losses to the treasury are estimated to be in the region of £3.5 billion.

The responsibility falls on the employer as they make the claim for the grant in an application on behalf of the employee. The majority of offences being investigated by HMRC relate to legislation under the Fraud Act.

The Crown Prosecution Service are prosecuting employers for numerous offences. Some of which are listed below:

  • Fraud by False Representation
  • Fraud by Abuse of Position
  • Fraud by Failing to Disclose Information
  • False Accounting
  • False Statements by Company Directors
  • Conspiracy to Defraud
  • Money Laundering
  • Failing to Prevent Tax Evasion
  • Cheating the Public Revenue

The HMRC are looking to pursue corporations, directors and individuals for any serious fraudulent misuse of the system. A corporation maybe investigated for the strict liability offence of failing to prevent the facilitation of tax evasion under the Criminal Finances Act 2017.

The HMRC hotline, which is used to report various forms of fraudulent activity, including the misuse of furlough, has reported 8,000 phone calls at the start of September 2020, which is a rise from previous months with the tax authority investigating 27,000 cases they describe as “high risk” claims. It can be assumed that a proportion of the “high risk” cases will be prosecuted through the criminal courts.

The most notable case to date involved the arrest of a man in the West Midlands in July 2020 for various fraud related offences with a value of £495,000.

HMRC have the power under civil law to recover money payments under the Finance Act 2020 that the recipient was not entitled to. If successfully prosecuted a claimant could loose their assets and family home.

legal advice
Where as the HMRC appreciate that there are genuine mistakes that are being made with claims, it is nether the less vitally important that you seek legal advice from one of our fraud experts on our 24-hour line of 0800 233 5822 if you have been contacted with regards to an interview. Even if you believe that you have made a genuine mistake it is essential that you let one of our legal experts guide you through this legal minefield.

If you have been summoned to attend court, then please contact us immediately so that we can assist you in any way possible. Any prosecution could have serious life changing consequences and can result in receiving a custodial sentence and or a fine. Our team are highly experienced in offering legal advice and services to employers and/or employees, and can help you not only to understand the processes but also your legal rights.