HMRC issues 'nudge' letters on furlough fraud

HMRC has begun writing to up to 3,000 employers each week telling them that its records show they may need to repay amounts received under the government’s Coronavirus Job Retention Scheme (furlough).

The ‘nudge’ letters say that furlough payments may need to be repaid because the business has claimed for a grant that is greater than they are entitled to or that they may not have met all of the conditions of the scheme. “HMRC is putting businesses on notice. They are likely to come down hard on those who don’t use this amnesty and are later found to be in breach of the rules,” said Andrew Sackey, a tax partner at Pinsent Masons. “It’s a good strategy as HMRC knows that most sensible businesses that realise that they may have over claimed will come forward – leaving only those who don’t undertake reasonable due-diligence, the reckless or the hard-core fraudsters to be targeted with follow up investigations.” Sackey added: “HMRC accepts that businesses can make mistakes. For example, employers are finding that even when they have clearly told furloughed employees that they must not work, employees - sometimes with the very best of intentions - have been generating large volumes of work emails in breach of the rules. Clear directions from head office about the prohibition on working will also have been ignored by some line managers. Businesses that have made furlough claims must ensure they have complied with the rules before the amnesty ends.”