The Government’s plans to widen the job retention scheme to include part time working could see widespread abuse and fraud, say tax and advisory firm Blick Rothenberg.
Simon Rothenberg, a senior manager at the firm, explained:
“With the widening of the job retention scheme to include part time working, the temptation for employers to exaggerate claims, especially in times when they need cash desperately, is likely to increase.”
“This will make HMRCs job in policing the scheme and auditing claims even harder and more time consuming, particularly for those working remotely.”
Rothenburg added:
“Hundreds of workers have already reported employers for furlough scheme fraud. Employers have claimed furlough while asking staff to continue working and, in some cases, claiming the grant under the job retention scheme but not telling their staff this was being done.”
“While the furlough scheme is most likely to be open to abuse, there are other government measures which could be open to fraud.
“The self-employment income support scheme requires people to still be working in the business which they reported on their 2018/19 tax return, on which this scheme is based.
“But many may not be, and it will be extremely difficult for HMRC to check in the short term.”
“Another scheme which could be abused, are bounce back loans, given the lack of detail required to obtain the loan.
“It is possible that companies will draw down on these government backed loans, withdraw the cash to pay the business owners (who, if they have been remunerated by dividends have received no support to date) and then liquidate the company if they do not see a possibility of returning the business to profitability.
“HMRC has set up a fraud hotline to identify and follow up potential abuse.
“While they and the Government will undoubtedly review and audit a number of the claims and potential abuse, the level of businesses claiming under each scheme and the number of staff it would require to check all of these means that there could be millions of pounds lost to people abusing the schemes.”
This is a very poor article full of speculation with no evidence to support it. While we appreciate there will always be an element of society that will try to deceive and defraud, we are talking about a tiny percentage. To write an article suggesting £millions will be lost is provocative and insulting to any hard working business person struggling to keep their head above water in these challenging times. Articles like this simply promote negative fears for business owners who will now worry that they will be looked upon as either scrounging from the taxpayers or being involved in an elaborate fraud. I have spent many weeks advising clients on how to utilise the support from government agencies and move forward with their business. I think if many of my clients are having to put thought to these applications I hardly think the average criminal is standing in line waiting to pounce . Both HMRC and banks have been rejecting many applications and this has caused many well established firms to now consider closing for good, your article simply fuels justification for agencies to decline solid companies to show a balance of rejection v acceptance to appease the fringe media.
why not look to help the industry that supports your media and fight for support that will be greatly needed in the next few months when our industry will be crying out for help. Do you really expect any minister to rally behind supporting our industry again when they know the media rhetoric will be “ yes give more millions to the criminals “
As the lockdown eases perhaps its time for journalists to get out from in front of their laptops and get some fresh air and think before you type ! I know it’s a harder task but there are positive stories and positive crusades out there that can be championed, but then we do live in much harder times
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