The Coronavirus Job Retention Scheme (CJRS) was introduced by the UK Government in March 2020 to combat the global pandemic. Considered to be a lifeline for many businesses, it enabled firms to put their staff on furlough, but keep them on their books.
So far, the furlough scheme has cost the Government over £53.8 billion – yet HMRC believes that up to 10% of this may have been claimed fraudulently. This equates to more than £5 billion.
What Action is HMRC Taking?
To combat this suspected fraud, the Government has recently invested £100 million into a specialist taskforce. Its responsibility will be to tackle dishonest behaviour across all COVID-19 support packages, including the furlough scheme and the bounce-back loan scheme. It will do this by checking the status of money paid out.
Letters are now being sent out to business owners to make sure they have complied with the schemes. There have been numerous versions of the CJRS since it started, and employers will need to be sure they have complied with each individual stage of the process.
What is Required From Me?
As part of these checks, HMRC is requesting a substantial amount of information about your furloughed employees, which will date back to the very first time you submitted a furlough scheme application. These checks exist to ensure you have met the conditions of receiving the grants and have claimed the correct amounts.
Details are required for every employee that has been placed on the furlough scheme. Therefore, the more employees you have on furlough, the more information you will need to provide.
You will need to supply the following details:
- Furlough start and end dates
- How your employees’ pay was calculated
- The amount paid in pension costs
- Number of hours employees usually work
- Number of hours on furlough
- Employer National Insurance (NI) contribution claimed
- Employer Pension contribution claimed
What Should I Do Now?
If you receive one of these job retention scheme compliance letters, we recommend that you review all of your claims and contact HMRC once this has been done. Should you believe your claims are all correct, you are asked to contact them by telephone. If not, and you think a mistake has been made, you are asked to email them. At this point, you will be given directions on how to make a full discloser.
Due to the value of fraud that has already been identified and reported, it is prudent for you to carry out your own checks in advance of receiving these compliance letters, to ensure you are fully prepared. We suggest that you plan for any information requests and make sure all of your records are complete and up to date.
How Inquesta can Help
If you need assistance with furlough scheme compliance, you can rely on Inquesta to help. Our Forensic Accounting team will offer you a proactive approach.
We can assist with any queries HMRC may have for you and gather all relevant information on your behalf. We can also liaise with the tax office and ensure the issue is dealt with promptly.
In addition, we have prepared some job retention scheme guidance to help you think about the status of your company before furlough comes to an end.
Acting now will save you time and money in the future, and give you peace of mind in the present.