HMRC update on furlough fraud guidance to be welcomed by business leaders

There have been reports of businesses and employers deliberately defrauding the Government's Job Retention Scheme - commonly known as the furlough scheme. In response, HMRC last week issued a statement that made it clear that it will go after companies and directors that have defrauded the system.

Following concerns that businesses whose non-compliance with the regulations was accidental - due to the complex nature of the rules - would also be targeted, HMRC have now updated the statement to make it clear that it will be lenient with those making accidental mistakes. The move is set to be welcomed by many business owners and employers, many of whom may have made mistakes due to a brand new and complex system.

David Hannah, Founder and Principal Consultant of Cornerstone Tax commented:

"The update to this statement from HMRC was sorely needed and will be a relief to many employers currently making use of the scheme to avoid making redundancies in the business.

Given the complexity of the claims process and the widespread confusion from both small and large businesses as to how to claim, who qualified and so on, it seemed manifestly unfair to assume foul play where error may be a more feasible explanation.

At a time when businesses will be working very hard to help the nation’s economy slowly get back to its feet - and dealing with the complexities required to do so - it seems counter-productive in the least for HMRC to adopt a threatening manner and give them something else to worry about.

This step is an important one taken by HMRC and will be welcomed by business leaders who have had to navigate the complex scheme."

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