During the first nine months of the coronavirus pandemic, HMRC received more than 91,000 calls to their fraud hotline. Many reports are believed to be in relation to furlough fraud.
Between April and December 2020, HMRC received around 10,000 calls on average each month. This is up from the monthly average of 9,000 the year before.
Furlough fraud is believed to be behind the increase in reports, alongside claims of businesses exploiting the Eat Out to Help Out Scheme. Some restaurants have been accused of faking orders to claim a larger amount from the government funded scheme.
Tax insurance group PfP says that HMRC is likely to increase resources in order to investigate as many fraudulent claims as possible. However, they suggest that many of the allegations may be false, which could leave many businesses facing a HMRC investigation, despite having committed no wrong.
In many instances, calls to the tax fraud hotline can involve an element of mischief, such as warring neighbours or former partners. Managing director at PfP said “Whilst those cheating the tax system should be held to account, heightened tax investigations are the last thing that decent, law-abiding businesses need at the moment.”
HMRC investigations can be a very time consuming and costly process, whilst causing ever greater stress for business owners during this time.
The managing director at PfP went on to say “‘HMRC will be looking to up the pressure on businesses in order to recoup as much tax revenue as possible in the coming months. It is therefore now more important than ever that businesses have cover in place to ensure they get the advice and support they need if an investigation is launched.”
Chancellor Rishi Sunak already announced in his March Budget, that he would be allocating £100 million on a Taxpayer Protection Taskforce, designed to help tackle the likes of furlough fraud. HMRC have made arrests in relation to furlough fraud and are expected to continue investigations where necessary.
A spokesperson from HMRC has said “Since the start of the pandemic, HMRC has worked consistently to support businesses during what we know has been a uniquely challenging time for them, while continuing to tackle tax fraud and avoidance to maintain a level playing field.”
“The suggestion that we are going to arbitrarily step-up investigations and pile unnecessary pressure on businesses as they seek to recover from the impact of coronavirus is completely false.”
At STS (Europe) we can offer help and advice for your business to ensure you are meeting the requirements of the furlough scheme and not committing any acts of fraud. If you suspect you have falsely claimed under the furlough scheme or Eat Out to Help Out scheme, our experts can guide you through the process and make disclosures to HMRC on your behalf.
For more information on how we can help you, get in touch with us via our contact page, call us on 01704 891676 or email info@stseurope.co.uk
