Date: 24/02/2021 | COVID-19, Corporate & Commercial
As the vaccination programme ramps up and we start to think about the relaxation of lockdown, the government is gearing up to raise some much-needed cash by tackling COVID related fraud. You might say, “So what? Nothing to do with me”, but the reality may be somewhat different, and you need to be prepared.
During the pandemic, the government has provided all sorts of support for businesses - furlough funding, bounce back loans, CBILS and tax deferrals to name but a few. These have been a lifeline for many but as we emerge from this crisis, reports of incorrect and fraudulent claims for support are increasing rapidly and are hitting the headlines. Not surprising really, given the sums involved. For example, if 5-10% of claims under the furlough scheme were incorrect or fraudulent, HMRC could recover £2-4 billion pounds of taxpayers’ money based on the amount paid out up to last September, not a figure the government can afford to ignore.
Claims for support have often been done in a hurry and at times of great stress. That means that mistakes, whether innocent or deliberate, will certainly have been made. At best those mistakes may lead to a requirement to repay funds and to pay fines and penalties; at worst they could lead to prosecution for fraud, money laundering and proceeds of crime offences. To minimise the risk of a big financial impact for both you and your company what do you need to know?
1. What are the biggest risk areas?
2. How will you know there may be an issue?
3. What should you do if you an issue is flagged?
The risk to you and your business is real. You may have no idea that a furlough claim was made for an employee who had left or that incorrect figures were used in a funding application, but ignorance is no defence, so the sooner any issues are dealt with the better. The cost of ignoring them can be high. At best, repaying government support and paying fines and penalties will have a serious financial impact on your business and at worst, criminal charges being brought will have a huge reputational impact.
If you do become aware of any errors or deliberate fraudulent actions, take legal advice as soon as possible to make sure your position is protected and the cost to the business minimised. The first arrests have already been made. Don’t let the next one be you.
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