Posted: 16 / 04 / 2020

During a recent press conference Chancellor of the Exchequer Rishi Sunak was asked about a warning that the Coronavirus Job Retention Scheme could be open to fraud and abuse.  He replied, “We’re obviously designing schemes, at pace, which haven’t been done before”.

He added that he deliberately made the scheme as simple as possible to counter the risk of fraud with the consequence that some people “might fall between the cracks”, finding they are not eligible to be included in the job retention scheme.

Verifying claims

”The ability to verify claims easily will minimise the risk of fraud or spurious claims,” he said. Nevertheless the head of the UK tax authority has warned that it will be targeted by organised crime because it is likely to pay out “vast” sums in a very short period.  Any scheme like this is a target for organised crime.

Ministers have prioritised speed over security because they know that they have to get the money to businesses urgently or they will go bust.

Fraud prevention measures

HMRC have put in place fraud prevention measures which include:

  • the requirement for an employer to have already been authenticated by HMRC
  • a four to six day payment processing period to allow background checks
  • checks/audit, potentially many years later, on employers after a pay-out has been made, to verify a claim was real and not inflated
  • encouraging use by employees and third parties of HMRC’s fraud helpline to report bad behaviour
  • setting out that where an employee has continued to work while furloughed this will result in a criminal conviction
  • threatening heavy financial penalties for companies that abuse the system