HM Revenue & Customs (HMRC) has revealed that its investigations have resulted in the first arrest as a result of furlough fraud.
Since the Coronavirus Job Retention Scheme (CJRS) was announced by the Chancellor in April this year, around £20billion has been paid out in furlough claims.
Figures released at the end of May showed that HMRC was actively investigating 1,868 potentially fraudulent furlough claims and, on 9 July, a 57-year-old man was arrested as part of an investigation into a suspected CJRS fraud believed to be worth £495,000.
Computers and other digital devices were seized and funds held in a bank account relating to his business have also been frozen.
Many of the fraudulent claims are believed to have resulted from employees working whilst on furlough, which is not permitted under the terms of the scheme.
HMRC’s report into the arrest for CJRS fraud suggests that this particular incident may have been deliberate as the individual was also arrested in relation to a suspected multi-million pound tax fraud and alleged money laundering offences.
However many other cases may be less clear cut and the services of a forensic accountant can be helpful to clear up any misunderstanding.
A forensic accountancy expert will be able to help by confirming whether staff members have really been furloughed by using payroll records or call logs to demonstrate whether employees were conducting work when they should have been furloughed or disprove any erroneous allegations made by HMRC.
At Moore Thompson, we have a number of experts who are experienced in providing specialist forensic advice relating to HMRC enquiries and allegations of fraud.
Our experts are also able to provide robust reports and act as expert witnesses in court proceedings.
For more information on our forensic and expert witness services, please contact Ken Maggs on 01775 711333.