As the Chancellor Rishi Sunak has said many times, the Coronavirus Job Retention Scheme (CJRS) has been a lifeline for businesses and a staggering £27.4 billion has been claimed to date through the scheme. However, the potential for fraud was recognised from the inception of the CJRS which explains HMRC's right to audit and the introduction of a fraud hotline and online whistleblower service.
It comes as no surprise then that HMRC made its first arrest under the CJRS this month. A 57 year old man from Solihull was arrested on suspicion of involvement in a £495,000 fraud on the CJRS. HMRC executed a search warrant, seized computers and froze funds held in a bank account connected to the arrested man's business. A further 8 people from the East Midlands have been arrested as part of this operation.
The acting director of the HMRC Fraud Investigation Service, Richard Las, is quoted as saying:
"The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used it responsibly, but we will not hesitate to act on reports of abuse of the scheme. This is taxpayers' money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding."
This is unlikely to be the last arrest and is a message from HMRC to businesses using the CJRS that abuse of the scheme will be investigated. Any businesses using the CJRS should ensure that all of their claims have been made legitimately and that funds received under the scheme have been properly applied. It is also worth bearing in mind that the power to claw-back under the CJRS is not confined to cases of fraud and will also apply where errors have been made which reinforces the need for businesses to audit their claims and processes to ensure that all claims are legitimate.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment team at Cleaver Fulton Rankin for further advice or information.
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