£3bn furlough fraud was caused by unscrupulous criminals
The Furlough scheme may have been introduced quickly and caused errors, but this was not the main reason for fraud, say leading tax and advisory firm Blick Rothenberg.
Fiona Fernie, a tax dispute resolution partner at the firm
said, “Reports from the National Audit Office that because the Furlough scheme
was brought in rapidly considerable levels of fraud and error were inevitable,
just don’t stack up. ”
She added, “The loss of more than £3bn cannot just be put
down to how quickly the scheme was brought in; the Government were under
pressure to do just that.
Whilst the rapidity with which the scheme was introduced may
have caused errors, it didn’t necessarily cause more fraud.”
Fiona said, “It was obvious from the outset that workers put
on furlough should not be allowed to work, and it is not clear how taking
longer to introduce the scheme would have made any difference. In fact, the
longer people have to find out the mechanics of a scheme like this, the longer
they have to work out ways of deliberately circumventing the rules.
“That is exactly what criminals and some greedy employers
appear to have done.”
She added, “The Government were never going to be able to
either check the email systems of everyone who claimed the grant to make sure
that workers on furlough were not sending emails, or visit sites to make sure
workers on furlough were not present at the time the grant applications were
being processed.”
“Those kinds of checks can only be done after the event as
part of an enquiry, and will be dependent to some extent on tip offs or
analysis of the data submitted using HMRC’s ‘Connect’ system to identify
anomalies and risks.”
Fiona said, “There could be large amounts of money that firms
have claimed in error and I urge businesses who are in any doubt to contact
HMRC immediately and raise the issue. If they don’t then what could have been a
simple mistake will be looked at as fraud and businesses will be investigated.”
She added, “As it was many employers complained about how
long it was before they were able to claim and the impact on their businesses;
there would have been even more people losing their jobs completely had the
scheme been introduced more slowly.”
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