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Increased HMRC Investigations

It has come to our attention that HMRC has increased the number of investigations into Coronavirus job Retention Scheme claims. If you have furloughed any employees, from one person to several members of staff, your claim may be looked into by HMRC.

Up to £3.5bn in Coronavirus Job Retention Scheme payments may have been claimed fraudulently or paid out in error, the government has said. As of September 2020, 27,000 “high risk” cases were being investigated. A key driver of investigations is calls to the furlough fraud hotline, often made by disgruntled, furloughed employees.

In our professional opinion, it will be a matter of time before HMRC extends this reach to cover the Self Employment Income Support Scheme (SEISS).

Both grants were implemented with clear eligibility criteria which were adjusted and made clear as subsequent versions and timescales were implemented. The next changes to the Coronavirus job Retention Scheme are planned for 1 July 2021. The fourth SEISS grant can be claimed on or before 1 June 2021.

In addition to investigating potentially fraudulent grant claims, HMRC continues to look into possible tax evasion.

Even when you are confident that everything you have done is correct, a HMRC investigation can still be an unsettling and time-consuming process.

What happens if HMRC investigates you

Firstly, you will be notified by HMRC if it decides to look into your affairs. This is usually followed by a request for information, such as more details about your tax return or grant claim. We advise that you are completely transparent and satisfy all requests for information.

If HMRC suspects that serious and deliberate tax evasion or a fraudulent claim is involved it may choose to deal with it on a civil basis. This is a structured and specialised process which allows HMRC to recover all outstanding tax plus interest and penalties from a person if full disclosure is made. If this is achieved, then HMRC will guarantee that the person will not be prosecuted for the issues disclosed.

The Hargreaves Owen team is here to help you by providing information and attending meetings as needed. However this can be a time-consuming and therefore costly process.

Pre-Empting Investigative Costs

We appreciate that HMRC investigations can be stressful and expensive. To help, we offer a tax compliance insurance policy, complete with the option of payment terms. If this is of interest, simply download the relevant application form below:

Plus, if you have any queries, contact the team at Hargreaves Owen. We’re here to help.

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