HMRC Furlough Fraud Payments

As revealed today by many news outlets, up to £3.5bn may have been over claimed by businesses in relation to the Coronavirus Job Retention Scheme. The scheme was designed so that during the period of intense lockdown, where many businesses simply could not operate, workers incomes would be protected, and the government had hoped that jobs would be protected.

Whilst many are divided on whether the scheme would be effective, it has been revealed that a monumental 300,000 redundancies were planned in the months of June and July alone, with unfortunately more expected to follow. One thing that the challenges of this year has brought is an acceleration on how consumers shop and also how consumers are more conscious on their spending habits, perhaps choosing to save more now and be a little wiser with their money.

The government has announced that they will be investigating 27,000 furlough claims immediately that are high risk, or they suspect may have been fraudulent or accidental. As the scheme was released with limited guidance from HMRC initially and businesses had to try to come to terms with the legislation, HMRC have been more lenient in their approach to recouping some of this money potentially paid out in error.

HMRC is particularly looking at businesses that did not use an agent to calculate their job retention scheme claim, as it is believed businesses that did not seek expert advice are more susceptible to accidental claim. This is attributable to most cases of tax within a business and is another good reason to seek expert advice on any taxes your business may be liable for, as gaining proper expert advice can often save you more in tax than the cost of the advice in which you are seeking.

As the furlough scheme comes to an end over the next couple of months, it's clear that with lockdown restrictions lifting, things are returning to a new 'normal' and that whilst may jobs have unfortunately been lost during this pandemic, there are new jobs being created, with Amazon and Tesco announcing the creation of tens of thousands of jobs.

But, more people than ever are deciding it's now or never in regards to realising their dream of working for themselves, and there is an increased number of people who feel that the pandemic has motivated them to either work self-employed or start their own company. With consumer habits changing there may be more of a demand in a field that you particularly feel there is an opportunity in the market to work self-employed. If you are interested in understanding more about becoming self-employed and the possible tax implications or benefits to yourself, please get in touch with us by email on enquiries@tamaccountants.co.uk and one of the team will be happy to give you some expert free advice.

Lewis Biddle