Failure to do so will attract hefty financial penalties that can be as much as 100 per cent on top of a repayment obligation. In such cases there is always scope to make representations on any penalty to be imposed.
A business, however, will inevitably be in a strong position if they are able to point to evidence that the claim, while incorrect, was made honestly and that on realising the inaccuracy it moved fast to remedy the position and bolster its anti-tax-evasion processes.
Separate from the question of penalty to be imposed by HMRC, those who have engaged in activity capable of amounting to furlough fraud should be aware of the prospect of director disqualification and tribunal complaints by employees.
Any dealings with HMRC about an over-claim also may adversely impact future applications for ‘fit and proper’ status – such approval is required to run or be involved in certain businesses that are regulated for anti-money-laundering purposes.
Additionally, any dealings with HMRC over the question of an over-claim will have a bearing on the question of financial integrity. A small number may be prosecuted for furlough fraud, but the implications of an allegation will extend beyond the criminal courts.
Anita Clifford is a barrister at Bright Line Law
