As the country begins to recover from the disruptions caused by the pandemic, the authorities will be investigating fraudulent claims made via various government funding schemes that were created to help people through the crisis. If they suspect a claim was fraudulently made, they will be looking at ways to recover the money.
The two main schemes are the Furlough scheme and the Bounce Back Loan scheme. (Payments under the ‘Eat Out to Help Out’ scheme will also be scruitinsed).
So far, HMRC has identified 27,000 high risk claims under the furlough scheme. It is estimated that £3.5 million pounds was fraudulently or incorrectly claimed. The time for self-declaring a mistake or a change in circumstances in relation to furlough payments ended on the 20th of October 2020. That means HMRC can treat any unwarranted payments that come to light after that date as deliberate or concealed. The claimant is then facing a penalty payment of up to £100% of the claim or prosecution.
The ‘Bounce Back Loan’ scheme enabled smaller businesses to quickly access cheap finance during the pandemic. £35 Billion was paid out very quickly, with minimum scrutiny of the applications. It is suspected that many claims were made where the turnover of the company was deliberately inflated in order to qualify for a greater loan. If an investigating authority thinks the over-estimate of turn-over was deliberate, it may decide to prosecute the claimant. Additionally, the regulated sector, may find themselves at risk from allegations of money laundering. For instance, where an accountant, may have handled furlough money or a bounce back loan in circumstances that required them to make a SARs report.
If, after being in receipt of government funding, a person becomes subject to such an investigation. It is advisable to seek professional legal advice as soon as possible, in order to minimise as far as possible, the matter escalating into a prosecution.
Tim Davies, our Criminal Defence Solcitor says, “Currently , the court estate has a huge backlog of cases waiting to be tried and so prosecutors are more willing, in certain cases, to be pragmatic. It may be that sensible, careful discussions with the investigator will result in an out of court settlement or no further action”.
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