The COVID pandemic was a difficult time for businesses, and many legitimately relied on financial support provided through government schemes to help them to survive and retain employees. However, it is estimated by HMRC that circa £10 billion was also lost as a result of incorrect applications and outright fraud.
Which Covid schemes are included in the amnesty?
The repayment window is designed to allow businesses to return funds they believe may have been claimed in error. It is an opportunity to resolve any uncertainties and avoid enforcement action being taken in respect of payments made incorrectly. This scheme applies to a wide range of COVID-era support, including the:
- Coronavirus Job Retention Scheme;
- Self Employed Income Support Scheme;
- Eat Out to Help Out Scheme;
- Cultural Recovery Fund;
- Business support grants;
- Grants from the Department for Health & Social Care; and
- Business Loan Guarantee Schemes.
Whistleblower website
A website has been set up by HMRC to allow people to report suspected fraud relating to Covid funds. It is not clear whether any reward will be offered to incentivise making such a report, given HMRC announced its intention to launch an enhanced reward scheme earlier this year.
The reporting website states that “there are no personal or legal repercussions if we find that no fraud was committed”. Regardless of whether a complaint has merit, lack of disclosure may result in businesses having to cooperate in complex and costly investigations by HMRC to demonstrate that any sums received were properly claimed.
What should business owners do?
During the pandemic, many businesses acted swiftly to secure support amid rapidly changing guidance and eligibility criteria. In some cases, payments may have been made based on misunderstood rules or evolving circumstances. Given the risk of enforcement action following the amnesty period, or investigations arising from unmeritorious reports, businesses should consider:
- Reviewing the accuracy of claims made and ensuring that proper records are kept;
- Seeking professional advice on eligibility; and
- Making voluntary repayments during the amnesty period if appropriate.
Taking proactive steps and obtaining advice now may help to avoid reputational issues, mitigate potential penalties and interest, and demonstrate good governance.
About the authors
Waqar is a Partner in the Dispute Resolution department, focusing on the resolution of complex tax matters. He acts for high net worth individuals and corporate clients across all sectors in respect of HMRC disputes and investigations across the full range of taxes. This typically includes VAT disputes, employment tax matters (including 'IR35'/off-payroll working), customs/excise duty issues, tax fraud investigations, and more recently, National Minimum Wage enquiries.
Andreas is a partner in our employment team. He has substantial litigation experience, with a particular focus on complex and high value employment and partnership disputes.
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