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In the context of how to avoid furlough penalties, it is worth bearing in mind that 11.7 million employee jobs were furloughed in the Coronavirus Job Retention Scheme.

In a post Will I Need To Repay Furlough Claim? we explored whether or not people and businesses would be required to repay their furlough claims.

According to a parliamentary report published on 23 December 2021 Coronavirus Job Retention Scheme: statistics, by 30 September 2021 when the scheme came to an end there were 1.16 jobs on furlough. That amounted to a staggering 4% of jobs in the marketplace with 21% of employers having at least one member of staff on furlough.

Covid-19 Recovery Finance schemes have seen wide instances of fraud and in response, a government Taxpayer Protection Taskforce has been put in place with over 1,000 investigators employed by HMRC to seek to combat furlough fraud. The government says in its published report Our approach to error and fraud in the COVID-19 support schemes dated 4 November 2021 that:

It will not investigate every instance of potential error or fraud, as in many cases it will not be proportionate or viable to do so.

Nevertheless, up to 30,000 cases could be examined during the three-year period up to 2022-2023.

To avoid furlough penalties or to try to limit them, examine your records, take advice and with the benefit of the same consider the merit of coming clean to HMRC in respect of discrepancies.

It is important that instances of furlough fraud or mistake are determined and then mitigated at the earliest opportunity to avoid the aggravating factors that can cause HMRC penalties to escalate. If action is deemed deliberate then HMRC has powers to issue penalties at up to 100% of the tax lost.

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If you have furloughed employees and are concerned, Oliver Elliot can help you. We Know Insolvency Inside Out.

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Disclaimer: How To Avoid Furlough Penalties

This page How To Avoid Furlough Penalties is not legal advice and should not be relied upon as such. This article How To Avoid Furlough Penalties is provided for information purposes only. You can contact us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

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Elliot Green

Licensed Insolvency Practitioner & Chartered Accountant. We Know Insolvency Inside Out.