As companies pay back more than £1.3bn in furlough payments they did not ultimately require, HM Revenue & Customs (HMRC) are investigating companies that may have abused the scheme, writes Corporate Tax Partner Heather Self.
Some of the repayments will be the correction of errors, but the majority is likely to be businesses deciding to repay funds after finding that they had done better than expected during the pandemic.
However, there is clear concern from the Government about incorrect and potentially fraudulent payments and HMRC will not hesitate to pursue those who have been abusing the scheme.
Companies may have inadvertently claimed for more than they were due or simply made a mistake in their calculations, but now is the time to check. If companies do discover an error, it is nearly always better to correct it voluntarily before HMRC start to investigate – penalties are lower (and often nil) if the initial disclosure is ‘unprompted’. If an investigation is started it could cost companies dearly.
This is probably the first time that businesses have voluntarily repaid Government funding in such large numbers, often after coming under sustained media pressure, particularly in the case of some retailers.
Would you like to know more?
If you would like to discuss the above or how it may affect you, please get in touch with your usual Blick Rothenberg contact or Heather Self using the details on this page.
For any press queries, please contact David Barzilay.
You can also visit our Coronavirus: Practical Guidance hub for more information.