The latest government figures on the furlough scheme show that up to 21 June, 1.1 million employers have received £22.9 billion since the scheme started. A further£7.6 billion has been paid to 2.6 million self employed businesses under the Self-Employment Income Support Scheme.
CJRS was an important lifeline for many businesses but it has come to light that it has been abused by some employers who were asking their staff to continue to work whilst furloughed. In some instances HMRC is finding clear wrongdoing, however it’s possible some businesses may have inadvertently breached the rules as there was little guidance available when the first claims were submitted.
HMRC has introduced a 90-day amnesty allowing businesses to repay furlough money claimed in error without threat of sanction or penalty. If businesses who incorrectly claimed CJRS payments don’t use the amnesty they could face investigation and fines.
Whilst its main focus is on investigations to determine whether employers fraudulently claimed payments under the furlough scheme, HMRC is likely to look at other aspects of a business’ tax affairs as well if they suspect wrong-doing. This could well trigger a full tax investigation which takes up valuable management time. Many businesses won’t want this attention a time when they are trying to get back on their feet post the Covid-19 restrictions.
If your business is subject to a tax investigation the Bedrock team can help. The team are experienced in providing support to help accountants and their clients through the challenges of managing a tax investigation. Read more about how we can help here.
