As companies pay back more than 1.3billion in furlough payments they did not ultimately require HMRC are investigating companies that may have abused the scheme, say leading tax and advisory firm Blick Rothenberg.
Heather Self, a partner at the firm said: “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.”
She added: “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.”
Heather said: “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.”
She added: “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.”
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