The Treasury have issued a stark warning to business leaders who have claimed for various levels of government support during the Covid-19 outbreak.
In this announcement, the government have confirmed that any business found to have fallen foul of the regulations and guidance issued may face penalties of up to 100% of the amount falsely claimed.
The Chancellor has been forced to take such action after a number of indicators pointed to widespread abuse of the support packages.
Specifically, many employers have been reported by their employees for making furlough claims on their behalf while still requiring them to continue to work.
Under the furlough scheme regulations, an employee is not able to conduct any active work – save for training – during their furlough leave.
Such employers will be given a short window of opportunity to correct any false claims, after which a penalty will be applied if the employer is found to be outside of the regulations.
Another area of concern is businesses claiming for Covid Bounce Back Loans when they do not require the assistance and/ or may misuse the funds and fail to pay these back.
In which circumstances, aggressive recovery action will commence including the possibility of prosecution.
Finally, some self-employed individuals may have claimed for support via a cash grand under the Self-Employed Income Support Scheme when they have not suffered adversely due to Covid-19.
HMRC will seek to determine if individuals fall into this category by comparing previous and present accounts submissions; expecting those who have suffered owing to Covid-19 to file accounts that reflect this.
Those sole traders who may fall into this category and fail to repay the funds may be required to pay a 100% penalty.
If you are concerned about how this announcement may affect you and your business, please contact a member of our expert team for support and guidance on this matter.
Coronavirus Support Team