Crowe invites SMEs to take Covid-19 business support audit
An audit expert says small and medium-sized businesses that have acted in good faith throughout lockdown need to ensure they are not caught out in an HMRC crackdown on abuse of furlough support and fraudulent applications for the variousGovernment support schemes made available.
Since April, SMEs have been able to apply for the Coronavirus Business Interruption Loan Scheme and the Coronavirus Future Fund and since May a Bounce Back Loan.
There were also other measures such as the Local Authority Discretionary Grants Fund and a range of employment support options.
Ross Prince, partner at national audit, tax, advisory and risk firm Crowe's Oldbury office, says navigating through the various support schemes has been a new experience for everyone.
“Who knew what furloughing meant before March this year? And Rishi Sunak’s package of measures announced to support UK businesses was – in the most over-used word of the year – unprecedented," he said.
He warned that SMEs and owner-managed businesses should take care to ensure that their house is in order as the various support schemes unwind or come to an end.
It may be that mistakes or errors may have been made unknowingly, and it is important that businesses do not get swept up with some of those that have unknowingly made errors or set out to abuse the system.
“For example, Government figures reveal that by mid-June £20.8 billion had been claimed under the furlough scheme, supporting 9.1 million jobs.
"The Government has recognised the risk, both of deliberate and accidental fraud, and has given notice that unless businesses notify HMRC within 30 days of new legislation that came into effect this month, they could face significant financial penalties," he explained.
It has also been claimed that as many as one in three workers has been pressured by their employers to carry on working while on furlough.
Mr Prince said: “It is therefore important to distinguish between furlough fraud and furlough mistakes, but ultimately if you don’t put your house in order and comply with the 30 day deadline, both will be treated the same.
“This also applies equally to the various financial support schemes.
“Many businesses will have scrambled to secure funds as cashflow dried up, and it is inevitable, when confronted with new procedures, paperwork and regulations, that mistakes will have been innocently made.”
It is far better to check now and seek professional advice to rectify mistakes that may have inadvertently been made before HMRC comes knocking.”
Businesses concerned they may have inadvertently breached some of the rules are invited to contact Crowe for an initial, informal discussion.
Mr Prince said: “If you have concerns, Crowe can help you work through them and, if needs be, advise on the best way of rectifying any mistakes that may have been made.”
