HMRC opens ‘serious’ tax fraud investigations – furlough fraudsters urged to ‘come clean’ | Personal Finance | Finance –

Published On: Fri, Aug 27th, 2021

HMRC opens ‘serious’ tax fraud investigations – furlough fraudsters urged to ‘come clean’ | Personal Finance | Finance


HMRC opened 278 civil investigations into suspected tax evasion during the first ten months of the pandemic according to analysis from UHY Hacker Young, the national accountancy group. The company warned the Government may use the tools at its disposal to target furlough claimants.

“HMRC’s offer of a Cop9 deal doesn’t last forever, so tax evaders who receive an offer shouldn’t ignore it.

“If they do spurn the approach from HMRC then they could find themselves facing a full-blown criminal prosecution.”

UHY Hacker Young explained it is expected that HMRC may use the Cop9 tool to encourage more suspected furlough fraudsters to “come clean.”

While the furlough scheme is a modern concern, under a Cop9 enquiry, HMRC has the right to seek recovery of tax, interest and penalties for as far back as 20 years.

UHY Hacker Young argued despite the far-reaching pecuniary powers, many will see this as a far preferable alternative to a criminal investigation.

Taxpayers will be required to provide details of the amount of tax they have evaded which saves HMRC from using its resources to investigate such matters.

HMRC sees Cop9 enquiries as a much quicker and less costly process than having to enter criminal proceedings.

Ms Berry concluded: “Given the severity of the financial penalties under Cop9 enquiries, including the possibility of being publicly named and shamed, they are most definitely not an amnesty nor an easy route out.

“However, taxpayers who have deliberately misrepresented their affairs are likely to have a more favourable outcome if they fully cooperate with HMRC and own up to committing tax fraud.”

Many have warned furlough fraud issues will cost the UK economy billions and in April, official HMRC figures showed furlough themed fraudulent activity rose to just over 26,000 and this was on top of dire warnings issued in late 2020.

In late 2020, Meg Hillier, a Chair of the Public Accounts Committee, warned the “hasty” roll out of the furlough scheme could have led to billions being lost from Government coffers due to fraud and/or negligence.

Ms Hillier said at the time: “Our finding of the astonishing lack of economic planning for a pandemic shows how the unacceptable room for fraud against taxpayers was allowed into the Government’s hastily drawn up economic support schemes.”



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